Texas shifts Bitcoin reserve custody plan toward direct BTC holdings

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Texas shifts to direct Bitcoin custody

Highlights

Texas Comptroller's request for proposals outlines a shift from BlackRock's IBIT ETF to direct onchain Bitcoin custody under a third-party arrangement.
The selected provider must enable secure custody, liquidity, and conversion of current IBIT positions to directly held Bitcoin within 60 days of contract execution.
Texas formed a Strategic Bitcoin Reserve Advisory Committee to oversee custody, risk management, transparency, and governance for the new digital asset reserve strategy.

Custody transition and reserve structure

As reported by the Texas Comptroller of Public Accounts (according to Cointelegraph), the state is seeking a custody and liquidity provider to acquire, hold, manage and report Bitcoin and any other qualifying cryptocurrency assets for the Strategic Bitcoin Reserve. A procurement document posted on May 7 and announced in a Thursday release outlines a shift away from sole reliance on ETF exposure toward direct onchain ownership under a third-party custody arrangement.

The request for proposals says Texas has used BlackRock's iShares Bitcoin Trust, or IBIT, as an interim holding method before moving to directly custodied Bitcoin. The winning firm would need to provide secure custody of digital assets in the name of the State of Texas, liquidity services for purchases and sales, and a transition plan to convert existing IBIT holdings into directly held Bitcoin within 60 days of contract execution.

The mandate extends beyond basic safekeeping. It requires institutional-grade security controls, standard and custom reporting, and a dedicated public website showing the amount and value of Bitcoin and any other qualifying cryptocurrencies held in the reserve.

Governance and broader state crypto strategy

The procurement notice was highlighted in a statement from Acting Comptroller Kelly Hancock announcing the members of the Texas Strategic Bitcoin Reserve Advisory Committee. The committee includes investment executive Laurie Dotter, Cormint Data Systems founder and chief executive Jamie McAvity, Southern Methodist University law professor Carla Reyes, and CleanSpark president and chief financial officer Gary Vecchiarelli.

The panel is tasked with advising on custody arrangements, risk management, disclosure of holdings and performance, and the broader governance of the reserve's investment strategy. Supporters of the law creating the reserve present Bitcoin, and potentially other large-cap cryptocurrencies, as a strategic asset that can hedge inflation and wider economic volatility over time.

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