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Arizona Bitcoin Reserve Bill 2026: What Happened and What's NextArizona SB 1025: the Bitcoin reserve bill that passed both chambers but was vetoed in 2025. What happened, what proponents are doing next, and how AZ compares to other states.
Texas is the most important Bitcoin state in America. More than 25% of global Bitcoin mining hash rate flows through Texas, the state has passed pro-Bitcoin legislation, and its energy grid makes it uniquely suited for Bitcoin's future. Here's what Texas's Bitcoin laws mean for miners, investors, and businesses in 2026.
Texas Bitcoin at a Glance
| Category | Texas Status |
|---|---|
| Bitcoin mining | Legal, unregulated at state level |
| Bitcoin money transmission | Requires Texas MSB license |
| Bitcoin as property | Yes (follows federal IRS classification) |
| Bitcoin in retirement accounts | Yes |
| Bitcoin-friendly legislation | HB 1666 (2021), SB 1751 (2023), HB 4474 (2023) |
| Mining share of US hash rate | ~25-30% |
| Electricity cost | Among lowest in continental US |
| Bitcoin reserve bill | Filed (2025 legislative session) |
Texas Bitcoin Mining: Why It Dominates
Texas became the dominant Bitcoin mining state through a combination of cheap electricity, deregulated energy markets, and grid infrastructure that was redesigned to accommodate interruptible industrial loads.
Cheap, Deregulated Electricity
Texas operates the only fully deregulated electricity market in the continental United States through ERCOT (Electric Reliability Council of Texas). Miners negotiate directly with power generators, bypassing retail utility markups.
Power purchase agreements (PPAs) for large industrial loads in West Texas can be as low as $0.025–$0.04/kWh during off-peak periods. For comparison, the US national average electricity rate for industrial customers is around $0.08/kWh. Bitcoin mining economics are extremely sensitive to electricity cost, so this 50-60% discount is a structural advantage.
Demand Response Programs
The Texas grid pays industrial customers to reduce consumption during peak demand periods. This is called demand response or interruptible load service.
Bitcoin miners are ideal demand response participants because:
- They can power down instantly without loss of production (just delayed hash rate)
- They run 24/7, so they have consumption to shed at any time
- Mining is not time-sensitive — pausing for 2 hours and resuming loses only those 2 hours of rewards
Major miners like Riot Platforms and Marathon Digital Holdings earn millions of dollars annually from ERCOT demand response payments — sometimes more than their Bitcoin revenue during periods of low prices or high difficulty. This turns grid stress into a revenue opportunity.
West Texas Land and Infrastructure
West Texas has vast cheap land near large power infrastructure, wind and solar generation, and sparse population that makes large industrial facilities practical. Permian Basin natural gas flaring has also been captured by some miners to generate cheap power from otherwise wasted gas.
Key Texas Bitcoin Laws
House Bill 1666 (2021): Clarifying Bitcoin as Money
Texas HB 1666 amended the Texas Uniform Commercial Code to clarify that Bitcoin is a form of money, entitled to the same legal protections as other monetary instruments. This was important for Bitcoin-secured lending, inheritance, and commercial transactions.
Practical impact: Bitcoin can now be formally used as collateral in Texas commercial transactions with clear legal standing. Bitcoin loans secured by Texas assets have clearer enforceability.
Senate Bill 1751 (2023): Bitcoin Mining Rights
SB 1751 was passed partly in response to concerns about Bitcoin mining's impact on the Texas grid. It established:
- A Bitcoin mining registry (miners must register with ERCOT if above a certain size)
- Demand response requirements for large miners
- Clarification that mining is a legal commercial activity in Texas
The bill also limited a proposed property tax exemption for mining equipment, which was controversial in the industry. But its overall effect was to formalize and legitimize Bitcoin mining as an industry in Texas law.
House Bill 4474 (2023): Digital Asset Regulation
HB 4474 established a clearer framework for digital asset businesses in Texas, including:
- Money service business (MSB) licensing requirements for crypto exchanges
- Consumer protection disclosures for digital asset transactions
- Examination authority for the Texas Department of Banking
This bill brought Texas into alignment with other major states on exchange regulation without adding burdensome new restrictions.
Texas Strategic Bitcoin Reserve Bill (2025)
In the 2025 legislative session, Texas filed a bill to allow the state treasury to hold Bitcoin as a reserve asset. The bill would permit (but not require) up to 1% of certain state funds to be invested in Bitcoin.
As of 2026, this bill has been through committee but not yet passed. Texas would join states like Wyoming in formally recognizing Bitcoin as a legitimate state financial asset if enacted.
Texas Bitcoin Taxes
Texas has no state income tax — one of only nine states in the US with this advantage. This has enormous implications for Bitcoin investors:
- Capital gains from Bitcoin sales: taxed at federal rates only (0%, 15%, or 20% long-term; ordinary income short-term) — no additional state tax
- Mining income: taxed as federal ordinary income — no additional state tax
- Business income from Bitcoin operations: subject to Texas franchise tax (a gross receipts tax), but no state income tax
Compared to California: A California resident selling $100,000 in Bitcoin gains pays up to 13.3% in state income tax on top of federal taxes. The same Texas resident pays $0 in state income tax. The difference on a $100k gain can be $10,000+ in tax savings.
For high-income Bitcoin investors, Texas (alongside Wyoming, Florida, and Nevada) is among the most tax-efficient states in the country.
Property tax note: Texas property taxes are relatively high compared to other no-income-tax states. Miners owning physical equipment in Texas face property tax on that equipment. SB 1751 partially addressed this, but it remains a cost consideration for large mining operations.
Mining in Texas: Practical Guide
Large-scale mining (>1 MW):
- Register with ERCOT as a large flexible load
- Negotiate directly with power generators or use a broker
- Participate in demand response programs for additional revenue
- Consider West Texas locations (Midland, Odessa, Abilene, San Angelo) for best PPA rates
Small-scale home mining:
- Home mining is legal with no specific state restrictions
- TDU (Transmission and Distribution Utility) charges apply even in deregulated market
- Home electricity rates are higher than industrial — typically $0.08–$0.12/kWh
- Retail choice in ERCOT means you can shop for the best rate
- See our home Bitcoin mining guide and Bitcoin mining profitability
Bitcoin businesses:
- Exchanges and OTC desks require Texas MSB license from the Texas Department of Banking
- Application process typically takes 60-90 days
- Must maintain net worth minimums and surety bonds
Major Bitcoin Companies in Texas
Texas has become a hub for Bitcoin industry:
- Riot Platforms — Largest US publicly traded Bitcoin miner; HQ in Castle Rock, CO but primary mining facility in Rockdale, TX (700+ MW capacity)
- Marathon Digital Holdings — Major US miner with Texas operations
- CleanSpark — Bitcoin miner with Texas expansion
- Unchained — Bitcoin financial services, HQ in Austin
- Swan Bitcoin — Bitcoin-only financial services, Texas presence
- Bitcoin Depot — ATM network with heavy Texas deployment
Austin in particular has become a Bitcoin hub, hosting several Bitcoin conferences annually and home to multiple Bitcoin companies.
Texas vs. Wyoming for Bitcoin
| Factor | Texas | Wyoming |
|---|---|---|
| State income tax | None | None |
| Mining infrastructure | World-class (25%+ of global hash rate) | Smaller scale |
| Electricity cost | Very low (industrial PPAs) | Moderate |
| Bitcoin legislation | Strong (HB 1666, SB 1751) | Strongest in US (DISA, DAO laws) |
| Bitcoin charter banks | No | Yes (SPDI banks) |
| Property tax | Higher | Lower |
| Bitcoin reserve | Bill filed | Bill filed |
| Climate for mining | Hot summers (cooling costs) | Cold winters (natural cooling) |
Texas wins on mining scale and electricity. Wyoming wins on legal framework and banking innovation. For individual investors moving to a no-income-tax state, both are excellent — choose based on lifestyle, not Bitcoin policy alone.
Frequently Asked Questions
Is Bitcoin mining legal in Texas? Yes. Bitcoin mining is legal and largely unregulated at the state level in Texas. Miners above a certain size must register with ERCOT and may be subject to demand response requirements under SB 1751.
Does Texas tax Bitcoin gains? No. Texas has no state income tax, so Bitcoin capital gains are taxed at federal rates only. This makes Texas one of the most tax-efficient states for Bitcoin investors.
Why is so much Bitcoin mining in Texas? Texas combines the lowest industrial electricity rates in the continental US (due to its deregulated ERCOT market), large available land, and grid infrastructure that pays miners to reduce consumption during peak demand — creating a structural economic advantage for mining.
Does Texas have a Bitcoin reserve? As of 2026, Texas has filed a bill to allow state treasury investment in Bitcoin but it has not yet passed. Several other states (including Wyoming, Utah, and North Dakota) have similar bills in various stages.
What license do I need to operate a Bitcoin exchange in Texas? A Texas Money Services Business (MSB) license from the Texas Department of Banking is required for exchanges and crypto businesses that transmit value.