Texas is moving forward with a change in how it holds its strategic Bitcoin reserves. According to a tender document released by the state government, Texas plans to convert its current exposure of approximately $10 million through the BlackRock Bitcoin ETF (IBIT) into direct BTC holdings held in custody by a third-party institution.
This arrangement means that Texas will no longer be satisfied with indirect allocation in the form of ETFs, but is preparing to establish its own system for the purchase, custody, valuation, and disclosure of Bitcoin for the state government. Documents indicate that the conversion must be completed within 60 days of the contract being granted.
Shift from ETFs to direct holdings
The tender document states that IBIT was previously used as a transitional tool in the early stages of establishing a strategic Bitcoin reserve, helping Texas gain initial exposure to Bitcoin. As the reserve mechanism gradually takes shape, the state government now hopes to convert this portion of the asset into directly held BTC.
The selected institution will be responsible for purchasing, safekeeping, and managing Bitcoin on behalf of Texas, and providing the necessary liquidity support for buying and selling. The custodial assets will be held in the name of Texas, rather than remaining in an ETF product.
The members of the advisory committee have been announced.
This move comes shortly after Acting Comptroller Kelly Hancock announced the members of the Texas Strategic Bitcoin Reserve Advisory Committee. Established under Senate Bill 21, the committee has five members whose responsibilities include advising the state government on custody policies, risk management, digital asset valuation, and reserve operations.
Disclosed members include investment executive Laurie Dotter, Cormint Data Systems CEO Jamie McAvity, Southern Methodist University law professor Carla Reyes, and CleanSpark president and CFO Gary Vecchiarelli.
Managed services have higher requirements
This Texas tender is not just for basic custody services. Documents show that the state government wants service providers to offer institutional-grade security controls, detailed reporting systems, and a website that can publicly display reserve holdings and market value.
The tender document also leaves room for the future inclusion of other eligible crypto assets, but the current focus remains on Bitcoin. If the conversion is completed as planned, Texas could become one of the first U.S. states to shift its Bitcoin reserves from ETF exposure to direct BTC holdings.
