Arizona is one step away from becoming the first US state to add Bitcoin to its strategic reserve officially. Based on available reports, lawmakers have passed two major bills: Senate Bill 1025 and Senate Bill 1373, which will allow Arizona to allocate up to 10% of its public funds, including treasury and pension assets, into Bitcoin. If the Bitcoin reserve bill is signed into law by Governor Katie Hobbs, Arizona will be the first to institutionalize crypto reserves at the state level.
Breaking down the Arizona Bitcoin Reserve Bills
Senate Bill 1025 creates a Strategic Bitcoin Reserve that allows the state to put up to 10% of its public fund holdings into Bitcoin and other digital assets. This includes funds managed by the state treasurer, such as treasury surpluses and pension contributions. The bill also outlines guidelines for secure custody, including the possibility of storing these assets in a federally recognized reserve if the US Secretary of the Treasury creates one in the future .
Senate Bill 1373 forms the Digital Assets Strategic Reserve Fund. This fund will be seeded not just with appropriated money but also with cryptocurrencies seized by the state, often tied to law enforcement or forfeiture actions. The bill allows the state treasurer to manage and potentially lend out these digital assets with specific oversight to ensure these activities don’t increase financial risk .
Both bills have risk control provisions and on-chain transparency mechanisms, making Arizona’s reserve potentially the most publicly auditable in the world.
A First in US Crypto Policy
While Texas, Florida and New Hampshire have considered or proposed legislation around crypto investments and payments, Arizona is the furthest along in actual implementation.
This sends a message to the federal government, which has been slow to provide comprehensive crypto regulation.
“This could change everything,” said Jayson Stewart, former mayor of Cool Valley, Missouri, who once proposed a city-wide Bitcoin airdrop. “If a state starts treating Bitcoin as a treasury asset, it challenges everything about how we define sovereign wealth in the digital age.”
Politics, Pushback, and the Governor’s Power
Governor Katie Hobbs has not taken a position on the bills yet. Her signature is the final step to make them law. But her history adds intrigue to the decision.
Until last week, Hobbs had a blanket veto threat on all legislation, demanding a resolution to the months-long budget fight over developmental disability funding. The standoff was resolved on April 24 with a bipartisan agreement, and she lifted her hold on new bills.
In 2023, she reportedly vetoed a similar bill that would have allowed Arizona to accept tax payments in crypto, citing volatility and unclear federal policy.
The Road Ahead
All eyes now turn to Governor Hobbs, who must either sign the bills into law or veto them, possibly triggering a legislative override attempt. A signature would establish Arizona as the first state in the union with an officially recognized Bitcoin reserve. A veto would halt the initiative but could open new political fault lines around blockchain adoption in public policy.
For now, Arizona stands on the brink of pioneering crypto-financed governance.
FAQs
What is the Arizona Bitcoin Reserve?
A state-run fund that could hold up to 10% of Arizona’s public funds in Bitcoin and other digital assets.
Has the Arizona Bitcoin Reserve been created?
No, both bills creating the reserve have passed the legislature but are waiting for Governor Katie Hobbs’ signature.
What funds will be used to buy Bitcoin?
Treasury surpluses, pension assets, and seized cryptocurrencies. Additional funds can be allocated by lawmakers.
Can the reserve be audited?
Yes, the legislation requires on-chain transparency and standard public auditability, making it one of the most transparent state-run reserves if passed.
Is this legal under federal law?
There is no federal law prohibiting states from holding digital assets, though there are gray areas around oversight and accounting.
Glossary
Bitcoin (BTC): A decentralized digital currency with no central authority, ‘maintained through cryptographic consensus.
Digital Asset: A virtual asset that uses blockchain technology for issuance and transfer, including cryptocurrencies and tokenized securities.
Strategic Reserve Fund: A government-run financial buffer to stabilize budgets or take advantage of investment opportunities.
On-Chain Auditability: The ability to track transactions and asset movements publicly on a blockchain.
Public Funds: Money controlled or managed by government entities, from taxes or public income streams.
Sources
Arizona Senate Bill 1025 – Arizona Legislature
Arizona Senate Bill 1373 – Arizona Legislature
Cointelegraph: Arizona Legislature Passes Bitcoin Reserve Bills
AP News: Arizona Governor Ends Veto Threat Over Disability Funding
Crypto News: Arizona Passes Strategic Bitcoin Reserve Bill
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