Mentioned in This Article
1. What the Texas crypto bill would do
Texas cities and counties would gain the option to invest up to $10 million each in Bitcoin (BTC) or other cryptocurrencies under House Bill 815, a crypto bill pre-filed by Democratic state Rep. Ron Reynolds of Missouri City for the 90th Texas Legislature. If lawmakers approve it, the new investment authority would take effect on September 1, 2027.
The measure is permissive rather than mandatory. It would not require any local government to buy digital assets. Instead, it would add cryptocurrency to the list of investments that municipalities and counties are legally allowed to make with the money they manage, leaving each local government to decide for itself whether to use the new power.
That distinction is central to understanding the proposal. Texas local governments today cannot put public money into crypto at all, so even an optional authority would mark a notable change in how the state's cities and counties are allowed to manage their funds.
2. How the bill changes the Public Funds Investment Act
HB 815 works by amending the Public Funds Investment Act, the section of the Texas Government Code that governs where public entities may place the money they hold. The act sets out an approved list of investment types, and anything not on that list is off limits. Cryptocurrency is not currently included.
The bill would insert a new section into the act dedicated to cryptocurrency as an authorized investment. Under that section, a municipality or a county could invest no more than $10 million of the money it owns or controls in Bitcoin or another cryptocurrency.
The cap is a fixed dollar amount rather than a percentage of a government's budget or reserves. That means the ceiling would be the same for a large urban county and a small rural town, so the potential share of public funds exposed to crypto would vary widely depending on the size of the local government involved.
The text applies specifically to municipalities and counties. It does not extend the authority to other types of public entities covered by the investment act.
3. Who is Ron Reynolds and when could HB 815 become law?
Rep. Ron Reynolds is a Democratic member of the Texas House of Representatives from Missouri City, in the Houston area. He pre-filed HB 815 ahead of the 90th Legislature, which convenes on January 12, 2027.
Pre-filing lets lawmakers submit legislation before a session formally begins, so that bills are ready to be referred to committees as soon as work starts. The Texas Legislature meets in regular session every two years, which gives a bill a limited window to move through both chambers and reach the governor.
As of the latest legislative record, HB 815 had been filed in the House but had not yet been assigned to a committee. Committee referral is the first major step in the process, since it determines which group of lawmakers will hold hearings on the bill and decide whether to send it to the full House.
If the bill clears both chambers and is signed into law, the authority it creates would not apply right away. The bill sets an effective date of September 1, 2027, which would be the earliest point at which any Texas city or county could begin buying cryptocurrency under the new rules.
4. How HB 815 builds on the Texas Strategic Bitcoin Reserve
HB 815 does not start from scratch. It borrows its definitions of Bitcoin and cryptocurrency from Senate Bill 21, the 2025 law that created the Texas Strategic Bitcoin Reserve in June of that year.
SB 21 gave the state itself the ability to hold Bitcoin as a reserve asset. The Texas Comptroller's office has since taken exposure for the reserve through the BlackRock iShares Bitcoin Trust (IBIT), an exchange-traded product that tracks the price of Bitcoin, rather than by holding coins directly.
Reusing SB 21's definitions keeps the language consistent across state law, so that Bitcoin and cryptocurrency mean the same thing whether the investor is the state or a local government. But HB 815 takes only the definitions. It does not carry over the other guardrails found in the reserve law.
5. What safeguards are missing from the crypto bill
Unlike SB 21, HB 815 does not include a market capitalization threshold that would limit which cryptocurrencies are eligible. It also contains no custody rules spelling out how digital assets must be stored, and no provisions for how losses should be handled.
Each of those gaps matters for public finance. A market capitalization threshold restricts investment to larger, more established assets, which tend to be more liquid and less prone to collapse than small tokens. Custody rules determine whether assets are held by a regulated third party, in a government-controlled wallet or through a fund, and each option carries its own security and operational risks. Loss provisions set out who is accountable and what happens if an investment falls sharply in value.
Without those rules in the bill, each participating city or county would largely have to design its own safeguards. That could lead to very different approaches across the state, with some local governments adopting strict controls and others far looser ones, and with taxpayers in different places receiving different levels of protection.
The bill also leaves open the question of how local governments should gain their exposure. The state chose an exchange-traded product for its own reserve, but HB 815 does not specify whether cities and counties should follow that route or hold coins directly.
6. Fund or direct holding: the choice local governments would face
Because HB 815 is silent on method, any city or county using the authority would first have to settle a basic question: should it buy a fund that tracks Bitcoin, or hold the asset itself? The answer shapes almost every other risk a local government would take on.
An exchange-traded product such as the one the state uses is bought and sold through an ordinary brokerage account. The fund's sponsor and its custodian handle the storage of the underlying coins, and the government's holding is recorded like any other security. That approach fits more easily into the systems public treasurers already use, though it adds fund fees and depends on the market hours of the exchange where the product trades.
Holding coins directly removes the fund layer but brings new duties. A government would need to choose a custodian or manage its own wallets, protect private keys, and set internal controls over who can move the assets. A mistake in any of those areas can lead to losses that cannot be reversed, which is why custody standards are usually a central part of public crypto policy.
Other cryptocurrencies raise further questions. The bill allows investment in Bitcoin or another cryptocurrency, and without a market capitalization threshold, the range of eligible assets is broad. Smaller tokens can trade in thin markets, where selling a position quickly may move the price, a concern for any public body that might need to turn its holdings back into cash to cover expenses.
7. An earlier attempt that did not pass
This is not Reynolds' first effort to bring crypto into Texas public finance. In 2025, House Bill 4258 sought broader rules for cryptocurrency investment involving public funds. That bill did not pass.
HB 815 reads as a narrower successor. It covers only cities and counties and limits each one's exposure to a fixed $10 million, a more modest scope that may be easier for lawmakers to evaluate than a wide-ranging overhaul of how public money can be invested.
The narrower approach also reflects how the debate has shifted since 2025. With the state reserve already in place, the question before lawmakers is no longer whether Texas government should hold Bitcoin at all, but whether that ability should extend down to local governments.
8. What it means for local finance officers and taxpayers
City and county finance officers would feel the effects most directly. HB 815 would hand them a new investment option, but also new responsibilities: deciding whether crypto fits their government's risk tolerance, choosing how to hold it, and explaining those choices to elected officials and residents.
Public funds are typically managed with an emphasis on preserving capital and keeping money available to pay for services, which is why investment acts tend to favor safe, liquid instruments. Bitcoin and other cryptocurrencies are known for sharp price swings, so any local government that uses the new authority would be taking on a different kind of risk than it faces with traditional holdings.
Supporters of permissive rules generally argue that local governments should be free to make their own choices, while critics of crypto in public portfolios point to volatility and to the difficulty of managing digital assets securely. HB 815, as written, leaves those judgments almost entirely to each city and county.
9. What comes next for HB 815
Three milestones will shape the bill's prospects. The first is committee assignment once the session opens in January 2027, which will indicate which lawmakers take up the proposal and how quickly it may move.
The second is whether amendments during the process restore the custody rules and market capitalization threshold found in SB 21. Adding those provisions would bring local investment closer to the standards that apply to the state's own reserve.
The third is the September 1, 2027 effective date. Even if the bill becomes law, that date marks the earliest moment any Texas city or county could put public money into Bitcoin, and it gives local governments time to decide whether they want to use the authority at all.