Texas lawmaker proposes $250M cap on Bitcoin investments

Texas Representative Ron Reynolds has introduced House Bill 4258, which seeks to limit the state's cryptocurrency investments to $250 million from the Economic Stabilisation Fund, commonly known as the "Rainy Day Fund."

Filed on March 10, the bill also proposes restricting municipalities and counties to a maximum of $10 million in crypto investments.

The legislation comes in response to the Texas Senate's recent approval of Senate Bill 21, which aims to establish a strategic Bitcoin (CRYPTO:BTC) reserve for the state.

Unlike SB 21, which imposes no cap on Bitcoin purchases, Reynolds’ bill introduces specific limits to ensure fiscal caution.

If passed, HB 4258 would take effect on September 1, 2025.

The proposal reflects ongoing debates over balancing financial innovation with risk management.

Proponents of SB 21, including its sponsor Senator Charles Schwertner, argue that a Bitcoin reserve could position Texas as a leader in digital asset innovation.

Lieutenant Governor Dan Patrick has also prioritised the initiative, citing its potential to diversify state investments.

However, Reynolds’ bill highlights concerns about overexposure to volatile assets like Bitcoin.

Critics of unrestricted crypto investments point to market risks and regulatory uncertainties as reasons for imposing limits.

Reynolds has not clarified whether his bill supports or counters SB 21 but appears focused on introducing safeguards for public funds.

The broader push for state-level Bitcoin reserves aligns with national trends.

President Donald Trump recently signed an executive order establishing a federal "Strategic Bitcoin Reserve," though legal experts question its enforceability.

Meanwhile, Wyoming Senator Cynthia Lummis has reintroduced legislation to codify the reserve into law.

If adopted, Texas would join other states exploring cryptocurrency as part of their fiscal strategies.

At the time of reporting, the Bitcoin (BTC) price was $81,832.81.