Texas pivots Strategic Bitcoin Reserve from BlackRock ETF to direct cryptocurrency custody
The Lone Star State is in the process of selecting a cryptocurrency custodian to transition its Strategic Bitcoin Reserve worth $10 million from BlackRock's IBIT ETF to directly owned Bitcoin, establishing comprehensive state infrastructure for BTC holdings.
The state of Texas is actively looking for a custody and liquidity provider that will facilitate the transfer of its Strategic Bitcoin Reserve away from BlackRock's iShares Bitcoin Trust (IBIT) spot Bitcoin exchange-traded fund (ETF) and into coins held directly, based on a procurement document issued by the state.
The initiative, which was published on May 7 and made public through a Thursday announcement from the Texas Comptroller's office, represents a strategic pivot that would bring Texas nearer to owning Bitcoin directly via a third-party custody solution instead of depending exclusively on ETF holdings, signaling a transition from ETF-based exposure toward direct onchain Bitcoin ownership.
The state of Texas has designated $10 million for the Strategic Bitcoin Reserve, funds that have been deployed to purchase IBIT as a temporary mechanism for holding the allocation prior to transitioning toward directly custodied Bitcoin, based on details contained in the request for proposals document.
According to the Comptroller's office, the selected firm will bear responsibility for purchasing, safeguarding, overseeing and providing reports on the state's Bitcoin holdings and any additional qualifying cryptocurrency assets, keeping options available for diversification into assets other than BTC in the future.
The scope of work encompasses secure digital asset custody held under the State of Texas's name, liquidity infrastructure to enable buying and selling activities, and an implementation roadmap that would convert current IBIT positions into Bitcoin under direct custody within a 60-day window following contract execution.
The request for proposals extends well beyond simple asset storage, demanding institutional-quality security measures, both standard and customized reporting capabilities, and a dedicated publicly accessible website that displays the quantity of Bitcoin and other approved cryptocurrencies the reserve maintains along with their current valuations.
Texas Comptroller names strategic Bitcoin reserve committee members
The request for proposals received attention in an announcement from Acting Comptroller Kelly Hancock revealing the appointees to the Texas Strategic Bitcoin Reserve Advisory Committee.
Committee members include seasoned investment executive Laurie Dotter, Cormint Data Systems founder and CEO Jamie McAvity, Southern Methodist University law professor and digital asset scholar Carla Reyes, and CleanSpark president and chief financial officer Gary Vecchiarelli.
The advisory committee has been assigned the responsibility of providing guidance on reserve operations, covering areas such as custody solutions, risk oversight and the state's approach to disclosing holdings and performance metrics to legislators and the general public, in addition to broader governance matters related to the reserve's overall investment approach.
Advocates of the legislation that established the reserve have promoted Bitcoin, along with potentially other large-cap cryptocurrencies, as a strategic holding that may serve as a hedge against inflation and economic instability in the long term.