Arizona is on the brink of becoming the first US state to hold Bitcoin and other digital assets in its Treasury, with Senate Bill 1373, the Digital Assets Strategic Reserve Fund, waiting for a final floor vote. This bill would create a fund managed by the state treasurer, filled with seized digital assets and appropriated funds from the legislature. The Treasurer would be able to invest up to 10% of the fund annually in digital assets, including Bitcoin, and use them to generate additional returns.
A companion measure, Senate Bill 1025, the Arizona Strategic Bitcoin Reserve Act, also passed the House Committee of the Whole and is awaiting a final vote. This bill would allow the state Treasury and retirement system to invest up to 10% of available funds specifically in Bitcoin. If passed, these bills would position Arizona as a pioneer in incorporating digital assets into state financial strategies. However, Governor Katie Hobbs has threatened to veto all legislation until a $122 million funding shortfall for the state’s Division of Developmental Disabilities is addressed.
The bills supported by Republican legislators would be managed through the state treasurer’s office. While the reserve fund would rely on forfeited assets or budgeted funds, the investment bill opens the door to direct allocation of state capital into large-cap cryptocurrencies like Bitcoin. Despite broader GOP support for crypto initiatives and momentum building in Arizona, similar legislation has faced setbacks in states like Oklahoma, Montana, North Dakota, and Wyoming.
Arizona’s push for digital asset integration contrasts with failed attempts in other states. Oklahoma’s Strategic Bitcoin Reserve Act recently collapsed in a Senate review, and Utah removed language allowing the state treasurer to hold Bitcoin directly. Texas and New Hampshire have pending legislation involving limited digital asset investments. Proponents argue that Bitcoin could serve as a hedge against inflation and a modern alternative to traditional cash reserves, while critics warn of the risks associated with speculative assets like crypto.
Arizona’s final vote on SB1307 is imminent, with Governor Hobbs’ decision likely determining the state’s future with digital assets. Despite setbacks in other legislatures, over three dozen strategic Bitcoin reserve proposals are active across 20 states. Whether Arizona will lead the way in integrating digital assets into state financial strategies or join the list of stalled efforts remains to be seen. The state’s position on Bitcoin and other cryptocurrencies may shape future legislative decisions and set a precedent for other states considering similar initiatives.
