The Republican Party’s Internal Divisions Could Spoil Bitcoin Reserve Bills

Despite strong industry momentum, three state-level Bitcoin Reserve bills have already failed. These failures have only happened because several Republican members voted against the bills.

Although the crypto industry made huge gains with Trump’s Presidency, its political influence may be shallower than expected. The remaining proposed bills will be an important test of strength.

Will Bitcoin Reserves Fail Across America?

Over the last few months, several US states have tried to set up their own Bitcoin Reserves. Nearly 30 states proposed a bill to add BTC to its reserve in the past few months. The goal with the majority of these bills is to use the leading cryptocurrency as a hedge against ongoing inflation.

The industry is very bullish because a few successful proposals would trigger billions in new acquisitions. If approved, a Bitcoin reserve would potentially hike the demand for BTC in a market where supply is already shrinking fast.

However, the movement hit a setback today. Montana lawmakers rejected this proposal 41-59, and they’re not its only opponents.

Currently, Montana’s House of Representatives has 58 Republicans and 42 Democrats, meaning that a substantial number of Republicans voted against the bill. North Dakota, a much redder state, saw an even higher number of defections.

Wyoming Senator Cynthia Lummis is a leading national pro-crypto advocate, but her own colleagues rejected a Bitcoin Reserve handily.

In other words, President Trump’s own party could become a major obstacle to state-level Bitcoin Reserves. During his campaign, Trump strongly advocated for a national Bitcoin reserve plan. Last month, he signed an executive order from the cryptocurrency work group to assess the potential for a national digital assets stockpile.

Yet it seems like several Republican members are not completely on board with his vision. If the Republicans continue showing this level of opposition at the state level, it may completely doom the project.

Other state-level Bitcoin Reserves may be facing similar pressure. Although Utah recently advanced its own proposal, other likely states are experiencing troubles.

Most recently, Texas’ new Lt. Governor called a Reserve a “top priority” for 2025, but vocal criticism has been growing. Some Republicans argue the plan is too risky for taxpayer funds, and media outlets are furious:

“Texas Republicans are on a fast track to approving SB 21. The bill will allow [them] to hire a crypto firm to manage the strategic reserve in yet another giveaway to an industry that does little more than waste electricity. SB 21 needs to die,” a column in the Houston Chronicle, the third-largest local paper in Texas, claimed.

Ultimately, these developments may be a major setback, but they don’t prove that a Bitcoin Reserve is doomed. The industry strongly supports this regulation and is prepared to throw significant political capital behind it.

This upcoming battle will be a real test case for the industry’s actual control of the GOP and the US legislature as a whole.