Texas Representative Proposes Bill Allowing Cities to Invest $10 Million in

A Texas legislator introduced a bill on Monday aimed at permitting each city and county within the state to invest up to $10 million of public funds in Bitcoin or other forms of cryptocurrency, notably without establishing any explicit regulations regarding the management of these digital assets.

House Bill 815, submitted by Rep. Ron Reynolds, a Democrat from Missouri City, on the inaugural day of prefiling for the 90th Texas Legislature, is titled “Relating to the authority of a municipality or county to invest money in cryptocurrencies.” The proposed legislation comprises two sections, which have been made accessible on the Texas Legislature’s official website.

The bill seeks to amend the Public Funds Investment Act, Chapter 2256 of the Texas Government Code, by introducing a new Section 2256.0165, designated as “Authorized Investments: Cryptocurrency.” This section stipulates that “a municipality or county may invest not more than $10 million of its money or money under its control in Bitcoin or another cryptocurrency.” Should this bill be enacted, the authority is projected to become effective on September 1, 2027.

It is important to note that the $10 million limit applies individually to each city or county rather than forming a centralized statewide fund. Furthermore, the bill does not extend to school districts and other local governments covered by the investment act.

Analysis of the Bill’s Content

The bill derives its definitions of “Bitcoin” and “cryptocurrency” from Section 403.701 of the Texas Government Code, which was enacted through Senate Bill 21 last year, establishing the Texas Strategic Bitcoin Reserve. For context, Bitcoin is characterized as a decentralized cryptocurrency generated by a peer-to-peer network that functions autonomously from any central authority or banking institution. Cryptocurrency, on the other hand, is more broadly defined as a virtual currency utilizing cryptography to ensure security in transactions logged on a distributed ledger, such as a blockchain.

Such definitions imply that municipalities and counties are not limited exclusively to investing in Bitcoin. Additionally, the bill does not incorporate the reserve law’s stipulation that mandates coins purchased for the state fund maintain an average market capitalization of at least $500 billion over the preceding 24 months, nor does it reference provisions related to cold storage and approved custodians.

Currently, the Public Funds Investment Act requires local governments to establish a written investment policy prioritizing the safety of principal and liquidity, as well as necessitating that investments are managed with the prudence expected in personal affairs. Consequently, municipalities and counties must incorporate cryptocurrency into this policy prior to any acquisitions. However, the new section remains silent on matters pertaining to custody, audits specific to digital assets, and mechanisms for addressing potential losses.

A More Constrictive Version of Previous Proposals

In March 2025, Reynolds had previously introduced a more comprehensive measure, House Bill 4258, in collaboration with Rep. Mihaela Plesa. This earlier bill sought to authorize the comptroller to invest as much as $250 million of the Economic Stabilization Fund, commonly referred to as the state’s rainy day fund, in Bitcoin or other cryptocurrencies, while also imposing the same $10 million limit for local governments. This proposal was referred to the House Committee on Delivery of Government Efficiency on April 1, 2025, but ultimately did not progress into law.

House Bill 815 simplifies the proposal by removing references to the rainy day fund, focusing solely on local government authority. The state’s reserve was established separately via Senate Bill 21, which was signed by Governor Greg Abbott in June 2025.

Subsequently, the Texas Comptroller’s office procured $5 million in BlackRock’s iShares Bitcoin Trust on November 20, 2025, to serve as a temporary measure while a strategy for direct custody was finalized, according to The Texas Tribune. A subsequent transaction elevated the reserve’s exposure to approximately $10 million. In May 2026, Acting Comptroller Kelly Hancock appointed an advisory committee and issued a request for proposals regarding custodial services, marking progress towards direct management of Bitcoin.

Next Steps

The prefiling period for the 90th Texas Legislature commenced on Monday, with the regular session set to begin on January 12, 2027. While the bill has been filed, it has yet to be assigned to a committee—a standard procedure that typically occurs after the legislature convenes. Should the bill pass through both legislative chambers and receive the governor’s approval, cities and counties would not be able to utilize the new investment authority until September 1, 2027.

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