If approved by the governor, Arizona could be established as the first state to solidify the regulation of crypto and digital assets at the frontier.
Arizona lawmakers passed two related bills that could position the state as a leader in state-level government cryptocurrency investing, provided Governor Katie Hobbs signs them into law.
The Arizona House passed Senate Bill 1025, formally known as the “Arizona Strategic Bitcoin Reserve Act,” on its third reading with a 31-25-4 vote on Monday.
On the same day, the House passed S.B. 1373, a companion bill establishing a “Digital Assets Strategic Reserve Fund,” with a 37-19-4 vote.
The Arizona Senate passed both bills earlier on February 27. After both chambers approved the bills without amendments, they are now awaiting formal transmittal to Governor Hobbs’ desk.
Arizona’s approaches to its proposed state crypto holdings are established by both bills. SB1025 focuses solely on Bitcoin as an investment asset, while SB1373 provides the infrastructure for managing various digital assets.
In March, lawmakers introduced a separate proposal to include Bitcoin ETFs in the state’s retirement plan portfolio for government workers. Earlier this month, Arizona also advanced a bill to protect Bitcoin miners and blockchain node operators.
SB1025: Arizona’s Strategic Bitcoin Reserve Act Introduced
SB1025 defines how the state manages public monies sourced from the state treasury and pensions.
The bill also mandates that if the U.S. Secretary of the Treasury establishes a Strategic Bitcoin Reserve to store the government’s Bitcoin, Arizona’s public funds may store their virtual currency holdings in a “secure, segregated account within the Strategic Bitcoin Reserve.”
SB1025 would amend Arizona law to allow the state treasurer and retirement systems to invest up to 10% of public funds in virtual currencies, specifically Bitcoin.
SB1373: Creation of the Digital Assets Strategic Reserve Fund
Meanwhile, SB1373 establishes a fund to hold “monies appropriated by the legislature and digital assets seized by this state,” including those obtained through criminal proceedings.
Under SB 1373, the legislature does not require funds allocated from an appropriation to automatically expire or “lapse” at the end of the fiscal year, as Arizona law typically mandates.
The fund may hold digital assets such as Bitcoin, stablecoins, and NFTs, with the State Treasurer managing them through approved custody solutions.
Allocation of Funding Priorities
If lawmakers approve the two bills, Arizona could become the first state to fully integrate crypto into its finances, following similar proposals from other states.
The governor still needs to approve the bills, but the approval process risks delay due to previous budget negotiations and partisan tensions.
Governor Hobbs warned on X earlier this month that he will veto “any bill not already on my desk,” explaining that “extreme Republican legislators” are holding funding for constituents with disabilities “hostage to their political theater.”
Although a budget dispute seemed resolved last Friday, Hobbs has not made any official statement regarding SB1025 and SB1373.
A response to Decrypt’s request for comments was not immediately provided by Arizona’s press office.
