After US President Donald Trump’s proposal for a Strategic Crypto Reserve bill, US states are following suit. Currently, Texas is debating a similar bill that would create a strategic reserve in Bitcoin. Still, the bill has prominent critics in the Senate, which led to a heated debate.
On March 6, the Texas Senate passed the SB-11 Texas Strategic Bitcoin Reserve bill, which proposes allocating some of the state’s investments into Bitcoin. The goal of the proposal was to diversify the state’s assets and serve as a hedge against inflation and unpredictability.
Republican Senator Charles Schwertner introduced the bill and plans to advocate for a $21 million allocation. However, the proposal came under fire by Democrat Senator Roland Gutierrez, who called Bitcoin “highly volatile” and “completely unregulated.”
Gutierrez questioned the logic that Bitcoin would be a useful asset to hold in reserve in times of economic decline. “When things are bad, Bitcoin goes down,” Gutierrez stated. He explained that historically, Bitcoin did not prove to be counter-cyclical, which would make it useful as a hedge against volatility. Schwertner retorted that Bitcoin is scarce, meaning that it is an inflation hedge.
The Democrat senator also stated that Bitcoin is completely unregulated, unlike the US dollar. “All I’ve heard is it’s an algorithm and a blockchain. And we’re supposed to allow that algorithm and some crypto bros … to regulate themselves?” Gutierrez asked.
Schwertner suggested that Bitcoin has proven itself to be a secure asset. Moreover, the Securities and Exchange Commission regulates the Exchange-Traded Products (ETPs) related to Bitcoin. At the same time, he retorted that centralized control of the dollar has contributed to its significant depreciation over the years.
“Can You Buy Pizza With Bitcoin?” Texas Senator Asks
At one point, the conversation shifted to the basics of how Bitcoin works. “This is a dumb question. Can you buy a pizza with Bitcoin?” Gutierrez asked Schwertner. Despite Schwertner explaining that this was possible, Gutierrez remained unconvinced.
Schwertner also attempted to explain Bitcoin halving, which is when the Bitcoin inflation rate drops by half. Despite the heated debate, the Senate bill passed with 25 votes in favor and 5 votes against. The bill will now proceed to the Texas House of Representatives for further debate.
READ MORE: Solana Co-Founder Criticizes Trump’s Crypto Strategic Reserve Plans
