SENATE APPROVES BITCOIN RESERVE
(AUSTIN) — Bitcoin, the world’s largest and most traded cryptocurrency, could become a state-held asset under a bill approved by the Senate on Thursday. Bill author and Georgetown Senator Charles Schwertner says that the instrument, like traditional value stores such as land or gold bullion, is a useful hedge against inflation. “Texas cannot expect to put its money in a one-percent savings account and keep up with inflation,” he said. “We need to be forward thinking as individuals are forward thinking when it comes to financial assets.” Schwertner has been a regular critic of the returns earned on state pension funds, and has encouraged seeking investment in other financial strategies with higher yield potential. Moreover, he said the bill would send a message to the federal government that Texas, along with 32 other states who have created similar reserves, are concerned about spending and the national debt.
Senator Charles Schwertner of Georgetown said that Bitcoin is a proven, valuable asset that should be part of the state’s investment portfolio.
Crypto currencies are assets that are created through computer algorithms, essentially converting electricity into a financial instrument that can be bought and sold. Transactions are tracked on a public ledger called a blockchain, and in the case of Bitcoin, only a finite number can ever be made – or “mined” in industry terms. While it can be highly volatile, the value of one bitcoin has risen as high as $103,000 last December. Schwertner said Bitcoin is a proven financial instrument, and it behooves the state to stay at the forefront of the changing financial landscape. “I want Texas to lead in this,” he said. “I think it is worthwhile that Texas expands its financial options when it comes to the store of value.”
The bill doesn’t appropriate any money; it creates an account under the Office of the Comptroller, who would be responsible for managing the asset. It would be up to lawmakers, through the appropriations process, to supply the account. At the committee hearing on the bill, Schwertner said he’s pursuing a $16 million rider to the Senate budget proposal as initial funding.
In committee Thursday, the Senate State Affairs Committee considered a bill that would make it illegal for foreign governments, companies, or individuals from certain adversarial nations to own land in Texas. SB 17, by Brenham Senator Lois Kolkhorst, is a response to increasing concerns that adversary nations could buy up agricultural, industrial, or mineral holdings and use those holdings against American national interests or security. “The bill ensures that food, energy, and national security are protected,” she said. Adversary nations are defined as those that have been designated as a national security threat in the last three annual assessments from the Director of National Intelligence. Today, that would apply to China, Russia, North Korea, and Iran.
Kolkhorst carried a similar bill last session, which passed the Senate but died in the House due to concerns that citizens and permanent residents originating from these countries would be inadvertently swept up in the prohibitions. SB 17 makes a number of changes to address those concerns. It changes language from “citizen” to “person domiciled in”, meaning that a person would have to reside in the adversary nation in order to fall under the ban. “It leaves citizenship out of it, it is about being ‘domiciled’” said Kolkhorst. “Domiciled in common law looks to the connection of the person to the hostile regime.” The bill only bans ownership; it would allow for foreign investment and leasing of property. It also wouldn’t apply to ownership of residential homesteads, and wouldn’t apply to citizens, legal permanent residents, or holders of dual-citizenship in the US and one of the designated nations.
Since the 2023 session, Kolkhorst says that 22 states have regulated foreign ownership of real property, and language prohibiting hostile foreign ownership of agricultural land passed the US House. “This has obviously been talked about quite a lot over the last year,” she said.
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