Congress is currently debating a crypto market structure bill , and state-level politicians are as much out to prove that they, and their states, won't be left out of the digital assets boom. Justin Marlowe, a public policy professor at the University of Chicago, sees the state-level trend as largely one of signaling at present. "If you're a governor and you want to broadcast that you are amenable to innovative business development in the digital economy, these are relatively low-cost, low-risk ways to send that signal. That's why we've seen leaders across the ideological spectrum and all over the country take tangible steps in this direction," he said.
Despite much of the legislation being largely sponsored or co-sponsored by Republicans, the adoption of crypto at the state level is not expected to strictly fall along party lines. The 2024 election cycle was the first time that the cryptocurrency industry played a major role in lobbying in both state and national elections. In fact, it was the largest corporate donor in an election cycle , with support given to candidates on both sides. It is already amassing a war chest for the 2026 midterms .
New Hampshire passed its crypto strategic reserve law last May, even before Texas, giving the state treasurer the authority to invest up to 5% of the state funds in crypto ETFs, though precious metals such as gold are also authorized for purchase. Arizona passed similar legislation, while Massachusetts , Ohio , and South Dakota have legislation at various stages of committee review.
Texas recently became the first state to purchase bitcoin after a legislative effort that began in 2024, but numerous states have joined the "Reserve Race" to pass legislation that will allow them to ultimately buy cryptocurrencies.
Led by Texas and New Hampshire, U.S. states across the national map, both red and blue in political stripes, are developing bitcoin strategic reserves and bringing cryptocurrencies onto their books through additional state finance and budgeting measures.
Where the state-level crypto efforts can be described as "bigger steps" — Marlowe cited Texas, Arizona, and Florida, as examples — he said it has helped to acknowledge the growing political power of crypto advocates in these states.
Similarities in the actions taken across states to date include include authorizing the state treasurer or other investment official to allow the investment of a limited amount of public funds in crypto and building out the governance structure needed to invest in crypto. This often will involve more frequent reporting requirements and stronger custodial agreements compared to traditional asset classes. The seeding of the reserve can take the form of utilizing cash or government-seized crypto, as in the recent case of the federal government. President Donald Trump signed an executive order to create a strategic bitcoin reserve last March, but limited the authorization to seized crypto in an effort to show taxpayers would bear no financial burden.
It is no surprise that Texas was the first state to fund a crypto reserve. Texas has been a crypto hub for years through its role in bitcoin mining. The state's affordable and flexible power, as well as a political environment that has largely been pro-crypto, led Texas in recent years to a sizable position in not just the national, but global bitcoin hashing market.
"Texas has spent the last few years becoming one of the key centers of bitcoin activity, especially on the mining side," said Christian Catalini, founder of the MIT Cryptoeconomics Lab, seeing this move as one that early branded the state as "open for business" when it comes to digital assets.
"Once you've made that bet on infrastructure and industry, adding some Bitcoin exposure at the treasury level is a natural next step," Catalini said. Such a move essentially makes the state's balance sheet one that is explicitly aligned with the ecosystem it aims to attract.
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