Led by Texas, New Hampshire, states race add bitcoin to public finance

US states with both red and blue political lines on the national map, led by Texas and New Hampshire, are developing bitcoin strategic reserves and bringing cryptocurrencies on their books through additional state financing and budgeting measures.

texas lately The first state to purchase Bitcoin Multiple states have joined after the legislative effort begins in 2024 “Replacement Race” Passing legislation that will eventually allow them to buy cryptocurrencies.

new hampshire Last May, even before Texas, it passed the crypto strategic reserve law, giving the state treasurer the authority to invest up to 5% of state funds in crypto ETFs, though precious metals like gold were also allowed to be purchased. Arizona passed a similar law massachusetts, OhioAnd south dakota There is legislation in various stages of committee review.

While much of the legislation is heavily supported or co-sponsored by Republicans, state-level adoption of crypto is not expected to fall exactly along party lines. The 2024 election cycle was the first time the cryptocurrency industry played a significant role in lobbying both state and national elections. In fact, it was the largest corporate donor in an election cycle, with support for candidates on both parties. He’s already amassing a war chest for the 2026 midterms.

Congress is currently debating a crypto market structure bill, and state-level politicians are doing their best to prove that they and their states will not be left out of the digital asset boom. Justin Marlowe, a professor of public policy at the University of Chicago, thinks the trend at the state level is largely a signaling trend right now. “If you’re a governor and you want to broadcast that you’re inclined to develop innovative business in the digital economy, these are relatively low-cost, low-risk ways to send that signal. So we’ve seen leaders across the ideological spectrum and across the country taking concrete steps in that direction,” he said.

Marlowe said that where state-level crypto efforts could be described as “bigger steps” (he cited Texas, Arizona, and Florida as examples) it helps acknowledge the growing political power of crypto advocates in those states.

Similarities in actions taken across states to date include giving the state treasurer or other investment authorities the authority to allow limited amounts of public funds to invest in crypto and creating the governance structure needed to invest in crypto. This will typically involve more frequent reporting requirements and stronger custody agreements than for traditional asset classes. Seeding the reserve can take the form of cash or government-seized cryptocurrencies, as in the federal government’s recent case. President Donald Trump signed an executive order last March to create a strategic bitcoin reserve, but limited the authority to seized cryptocurrencies in an attempt to show that taxpayers would not bear any financial burden.

It’s no surprise that Texas is the first state to fund a crypto reserve. Texas has been a crypto hub for years due to its role in Bitcoin mining. The state’s affordability and flexibility, as well as the largely pro-crypto political environment, have made Texas a sizeable presence in not only the national but also the global bitcoin hash market in recent years.

“Texas has spent the last few years establishing itself as one of the key centers of bitcoin activity, particularly on the mining side,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab, who saw the move as early marking the state as “open for business” when it comes to digital assets.

“After making this bet on infrastructure and industry, adding some Bitcoin exposure at the treasury level is a natural next step,” Catalini said. Such a move essentially aligns the state’s balance sheet clearly with the ecosystem it aims to attract.

Texas also has a long history with gold, Bitcoin’s traditional market rival.

“Texas has proven to be the cornerstone of government adoption of Bitcoin, starting with laws allowing legal custody regulations similar to the gold storage laws that are well established here,” said Nik Bhatia, founder of The Bitcoin Layer.

When it comes to storing physical gold, Texas has clear rules on storage and ownership, and even the language used (vaults, custodians) helps grease the wheels for crypto assets at the state level. Texas Bullion Depository The 2015 law allowing the storage of bullion and precious metals at the state level has been adapted to apply specifically to digital assets such as Bitcoin. The Texas Bullion Depository was the first government-run precious metal depository in the country.

Texas has not purchased any on-chain bitcoin. Texas bought a stake in a bitcoin ETF — the largest bitcoin ETF worth about $5 million — after passing legislation to create a strategic bitcoin reserve that gives the state comptroller the authority to hold the cryptocurrency. Black Rock iShares’ Bitcoin Trust (IBIT), since its launch in January 2024, assets under management have grown to over $72 billion.

The Comptroller’s office made the purchase on the morning of November 20, 2025, when the price of a single Bitcoin was $91,336. As of Saturday morning bitcoin It was trading just above $95,000.

Bhatia said approval of bitcoin ETFs by the SEC is crucial to the state’s plans to get comfortable with assets under existing U.S. securities law. “Using ETFs is a very clean and safe way to invest in Bitcoin by minimizing storage logistics risk and opting for security law protection,” Bhatia said.

Texas state officials announced this purchase, in which only half of the $10 million allocated by the United States was used. Texas Strategic Bitcoin Reserve — as a “placeholder” while providing security and storage for raw bitcoin.

Cryptocurrency’s transition into core government finance and budgeting

In addition to the concept of reserve funds, governments are bringing crypto into core finance functions in an approach that balances the inherent fear of entering new areas with the desire to be part of the fast-moving crypto world.

New Hampshire, for example, became the first state to approve the issuance of this document. bitcoin backed municipal bond Last November, a $100 million issuance took place, the first time cryptocurrency was used as collateral in the U.S. municipal bond market. The deal has not yet materialized, but it is planned to happen this year. “The idea is that they will use bitcoin to support a municipal bond issue, the proceeds of which will then be split into loans to smaller governments for economic development projects across the state,” Marlowe said. Repayment of these loans will enable the fund to be recapitalized.

This is a creative evolution in state finances, but according to Marlowe, like most state-level crypto development mechanisms, it uses existing fiscal structures and state goals; with similar public bonds used in previous years for projects such as clean water, school improvements and other infrastructure. “What is different here is that Bitcoin is used as collateral instead of taxpayer dollars,” he said.

In many states, including, Colorado, UtahAnd Louisianacrypto is now accepted as payment for taxes and other government business. As more state public finance crypto efforts develop, this shift represents a shift in the underlying philosophy of security and liquidity that has dominated investments by state and local funds for centuries.

In recent years, assets including real estate and private equity have broadened the investment approach of public funds; but crypto represents not only the newest addition, but also the most volatile.

“For many in the state/local investment industry, crypto-backed assets are still too speculative and volatile for public money,” Marlowe said. “But others, and I think there’s sort of a generational shift in the works, actually see this as a decent store of value that’s stronger in terms of a lot of other public sector values ​​like transparency and asset integrity,” he added.