New Texas Legislation Allows Local Governments to Invest in Cryptocurrency Up to $10 Million

Texas Bill to Expand Cryptocurrency Investment for Local Governments

In a significant move to expand cryptocurrency investment opportunities for local governments, Texas Representative Ron Reynolds has introduced a bill allowing cities and counties to invest up to $10 million in Bitcoin and other digital currencies. This initiative comes as part of House Bill 815, which aims to amend the Public Funds Investment Act by establishing provisions specifically for cryptocurrency investments. Filed on November 9, ahead of the Texas Legislature's upcoming session, the bill seeks to provide municipalities and counties with the flexibility to manage their funds more dynamically.

Key Features of House Bill 815

The proposed legislation does not impose the same stringent market-cap requirements that limit state-level Bitcoin reserves, which necessitate that assets average at least $500 billion in market capitalization over the past 24 months. Instead, HB 815 permits local entities to make investments without a minimum requirement or obligatory allocation of state funds, easing the entry for smaller municipalities looking to diversify their portfolios.

The text specifies that the bill is applicable exclusively to municipalities and counties, intentionally omitting schools and other public entities from this investment option.

Investment Discretion and Structure

Under the new proposal, local governments would have the discretion to decide whether or not to invest, which means there will be no mandate for them to participate, nor will they be required to reach a minimum investment threshold. The bill’s framework is structured to ensure that the municipalities wouldn't share a $10 million pool but could individually make investments up to that specified limit.

Notably, the legislation does not create a separate reserve fund for municipal investments nor designate specific cryptocurrencies to be included in the local investment strategies.

Definitions and Previous Legislation

HB 815 includes provisions that reference existing definitions from the Government Code, particularly from a law enacted in 2025, which defines Bitcoin as a decentralized cryptocurrency operating independently of any central authority. The bill broadens the definition to include any virtual currencies secured through cryptographic techniques and recorded on a blockchain ledger.

Previous iterations of similar legislation were proposed by Reynolds, including a 2025 measure that intended to allow the state to invest $250 million from the Economic Stabilization Fund in cryptocurrencies. However, this new proposal does not carry forward that specific provision, focusing solely on local government investments.

Conclusion

The Texas state reserve has taken steps towards cryptocurrency investment in the past, including an acquisition of BlackRock ETF shares as part of its $10 million reserve initiative. As of May 2026, the reserve reportedly had around $10 million exposure to Bitcoin through this ETF. Through HB 815, local governments could potentially align themselves with the growing trend of cryptocurrency investments, providing them with enhanced options for managing their financial resources in an evolving economic landscape.