Texas has made a historic move toward establishing the first state-backed cryptocurrency reserve in the United States, investing $5 million in BlackRock’s spot Bitcoin ETF. This investment in the iShares Bitcoin Trust is viewed by officials as a temporary measure while the state finalizes a contract with a custodian for the direct purchase and storage of digital assets. This decision is part of a legislative initiative that previously allocated $10 million to establish a strategic Bitcoin reserve.

While pension funds in other states, such as Michigan and Wisconsin, have already invested in cryptocurrency ETFs, Texas is the first to establish a comprehensive state reserve on its balance sheet. Lee Bratcher, president of the Texas Blockchain Council, highlighted the timely nature of the investment. The purchase was made during a market correction, when Bitcoin was trading at around $87,000 per coin, down from historic highs above $120,000.

Other regions are looking to Texas and trying to follow suit. New Hampshire has passed legislation to create a reserve and is considering issuing $100 million in Bitcoin bonds, although the project’s implementation is currently delayed. Arizona has also allowed unclaimed crypto assets to be directed into its own fund. Nonetheless, Texas is currently leading the charge in integrating cryptocurrency into the US state financial system.