According to Johnny Garcia, Managing Director of Institutional Growth and Capital Markets at the VeChain Foundation, Texas will likely become the next state to establish a strategic Bitcoin reserve after New Hampshire.
In an exclusive interview with BeInCrypto, Garcia explained that states with pro-innovation leadership are more inclined to follow New Hampshire’s example. Meanwhile, others may adopt a more cautious, wait-and-see approach.
Why States Like Texas Are More Likely to Follow New Hampshire’s Bitcoin Reserve Lead
The VeChain executive described New Hampshire’s passage of House Bill 302 as a ‘landmark moment’ for digital assets. He stated that the development highlights Bitcoin’s growing recognition as a strategic financial instrument.
It also lays the groundwork to encourage wider blockchain adoption by normalizing digital assets in public portfolios.
“Momentum has been gathering at the State level since the presidential inauguration, and have commented before, there is a sea change taking place in the minds of State representatives across the general perception of Bitcoin [and other crypto assets] in the US,” Garcia told BeInCrypto.
Importantly, he believes the move could prompt the states already considering related legislation to accelerate their efforts so they don’t fall behind. The latest data from Bitcoin Laws shows that as of May 2025, 37 digital asset-related bills are active in 20 states.
Live Bitcoin Reserve Bills Across 20 States. Source: Bitcoin Laws
However, Garcia emphasized that the success of these bills depends on various factors. These include a state’s political climate, economic priorities, and risk tolerance.
“States with pro-innovation leadership, like Texas or Utah, are more likely to follow New Hampshire’s lead in short order, while others may wait to see how things play out for N.H,” he added.
This dynamic is already playing out in practice. For instance, on May 6, New Hampshire’s Republican Governor Kelly Ayotte signed HB302, allowing the state to allocate up to 5% of its funds in Bitcoin.
Nevertheless, Arizona’s Democratic Governor, Katie Hobbs, vetoed Senate Bill 1025, SB 1373, and SB 1024, citing concerns over Bitcoin’s volatility. Still, she signed HB 2749. The bill permits the state to claim abandoned digital assets without making direct investments.
With Texas now in the spotlight, there is strong optimism that similar legislation will be signed into law. Republican Governor Greg Abbott has expressed a favorable outlook toward the industry. The Texas Legislative session ends on June 2, so the decision could come any day now.
This trend highlights a clear difference of opinion between Democrats and Republicans regarding investments in digital asset reserves, a divide Garcia also acknowledges.
“These differences are nothing new, and I chalk them up to deeper-rooted perspectives, just like there are conservatives and liberals, or risk takers and those who like to play things safe. Some may try to tease out those groups and label people on one side as Democratic and the other as Republican, but I think that is too simplistic,” he said.
He acknowledged that bridging this gap poses a significant, but surmountable, challenge. The executive noted that increased cooperation can be fostered through education and a deeper understanding of the technology’s potential benefits and risks.
According to Garcia, the focus should be on identifying shared goals, such as leveraging blockchain to improve efficiency and transparency in government operations—an approach that could lay the groundwork for bipartisan collaboration.
“The ultimate goal would be to develop a thoughtful and balanced approach to digital assets that can benefit all Americans, regardless of political affiliation. This can be achieved by moving the conversation beyond partisan lines and focusing on the long-term economic and technological implications,” Garcia disclosed to BeInCrypto.
How Will State-Level Interest Impact Broader Crypto Adoption?
Whether Democrats and Republicans will ever fully agree on digital assets remains uncertain. Despite this, the introduction of bills and increased discussions at the state level signal growing interest and momentum.
Garcia said this shift marks a fundamental change in how public finance views blockchain assets, recognizing them as tools for innovation and resilience.
“It, combined with the strength of Bitcoin, has rekindled the discussion around ‘digital gold’ and could help reshape public finance by introducing decentralized, censorship-resistant assets into traditional portfolios,” he commented.
Furthermore, Garcia outlined three ways state-level interest will enhance mainstream and enterprise cryptocurrency accessibility and adoption.
- It normalizes digital assets as a strategic asset class, not just speculative. This encourages more institutional and enterprise participation.
- This also pushes policymakers and the public to better understand digital assets’ risks and benefits, which can lead to clearer and better regulations.
- It helps build infrastructure like regulated custody and on-chain auditability. This makes blockchain adoption easier for businesses.
He also said that while accessibility remains a challenge for mainstream adoption, state-backed initiatives could foster partnerships between the public and private sectors. This collaboration could lead to the development of user-friendly wallets, custody services, and decentralized finance platforms, expanding access for both retail and institutional users.
“This aligns with our focus at VeChain on scalable, enterprise-grade blockchain solutions, and we anticipate that state-level adoption will create a ripple effect, accelerating the integration of digital assets into both public and private sectors,” Garcia remarked.
The Balance Between Opportunity and Risk in State Crypto Holdings
While the benefits inspire optimism, the reserves carry several implications for a common taxpayer. Garcia explained that supporters believe state investments could boost long-term returns and diversify away from inflation-prone assets, potentially strengthening the state’s finances and benefiting taxpayers. Yet, he claimed,
“We have not yet reached the point where Bitcoin has achieved a greater level of stability, and if it sees a similar pullback compared to previous cycles, that would greatly diminish interest in setting up reserves and could cost taxpayers money.”
Garcia warned that significant price drops could lead to losses in the state’s reserves. Thus, if the allocation is too large or poorly managed, this could potentially threaten financial stability.
“This could, in theory, lead to pressure for tax policy changes to offset those losses, although this would depend heavily on the scale of the investment and the state’s overall financial health,” he mentioned to BeInCrypto.
Garcia advocated educating taxpayers about both the benefits and risks to maintain public trust. He emphasized that the long-term impact will depend on the responsible and strategic management of these reserves.
Beyond tax concerns, Garcia detailed several challenges states may face when implementing crypto reserves.
“The volatility of digital assets remains the biggest challenge facing states looking to implement reserves, as managing this volatility within a public treasury framework will require careful consideration and potentially sophisticated risk management strategies,” he commented.
Garcia also mentioned that educating lawmakers and the public is crucial for wider acceptance, as many state officials lack expertise in digital asset management and will need training or specialists. He underlined that federal regulatory uncertainty adds complexity. Therefore, clear rules on custody and reporting are necessary.
According to Garcia, transparency and strong cybersecurity measures are other key factors essential to ensuring the long-term success of these initiatives.
The Road to a National Strategic Bitcoin Reserve
Meanwhile, Garcia pointed out that concerns over taxes and market volatility are why President Trump’s Bitcoin reserve does not include provisions for investing the country’s funds. Instead, it focuses on using forfeited assets to build the stockpile.
However, a national-level bill seeks to achieve this. The BITCOIN Act, introduced by Senator Cynthia Lummis, proposes establishing a Strategic Bitcoin Reserve.
The SBR would involve acquiring 1 million Bitcoins over five years and holding them for at least 20 years. Garcia declared that allowing direct Bitcoin investments would depend on shifting political and economic factors.
“Allowing for such purchases will require bipartisan support in both the House and the Senate, along with the President’s signature, but as the recent stall for the GENIUS Act shows, lawmakers are far from being on the same page,” the executive shared with BeInCrypto.
Garcia believes that a clear regulatory framework for crypto and a plan to incorporate Bitcoin into a strategic reserve will eventually be established by law. Nonetheless, the timeline and specific details of these bills remain ‘challenging to predict.’
