The cryptocurrency with the second-largest market value was poised to satisfy Texas’ crypto reserve law until a recent decline in price on Friday.

This year, Texas legislators established a law for a strategic Bitcoin reserve, paving the way for the inclusion of other cryptocurrencies like Ether, as indicated by the bill’s sponsor.

Speaking with Cointelegraph, Texas state senator Charles Schwertner shared details on the Bitcoin reserve bill, which was signed into law by Governor Greg Abbott in June. The legislation permits the state to maintain additional cryptocurrencies in a special fund outside the state treasury, but only Bitcoin currently qualifies.{:.translated}

“I’m really interested to see the speed at which they establish the reserve and how it acts from a returns standpoint,” said Schwertner. “If Ethereum maintains its market cap over 24 months, I think it’s reasonable and prudent to give direction that Ethereum could be added to the cryptocurrency reserve.”

Comparison of Crypto Reserve Laws

While other states like Arizona and New Hampshire have also passed similar legislation, Texas is unique because it allocates taxpayer money directly towards establishing the reserve. Under the bill, any cryptocurrency must possess an average market cap of at least $500 billion over the past 24 months to be considered.

Ether has met this market cap only intermittently. As of publication, its market cap was approximately $494 billion after considerable volatility in the crypto market on Friday.

The Texas legislation reflects broader trends in states responding to federal directives on cryptocurrency reserves.{:.translated}