In a groundbreaking move, Arizona has become the first state in the United States to enact legislation that creates a Strategic Bitcoin Reserve. This historic decision came after a voting session held by the state legislature on April 28.
The Arizona House has approved Senate Bill 1025 with a vote tally of 31 to 25, as reported on the state legislature’s website. The legislation, introduced by Republican Senator Wendy Rogers, represents a bold move to integrate cryptocurrency into the financial framework at the state level. It allows the state treasury to allocate as much as 10% of public funds to Bitcoin.
The legislature approved SB1373, a companion measure, by a vote of 37-19. The proposal advocates for the creation of a reserve fund managed by the state treasurer, utilising assets confiscated during criminal investigations. It also emphasises a broader scope that includes digital assets. Arizona is emerging as a national leader in the adoption of digital assets, outpacing comparable initiatives in states such as Texas and New Hampshire.
Proponents argue that a Bitcoin reserve has the potential to diversify state assets, safeguard against inflation, and prepare Arizona for a financial future increasingly influenced by blockchain technology. They highlight Bitcoin’s decentralisation and fixed supply as its key benefits compared to traditional fiat currencies.
SB1025 mandates that Bitcoin be maintained in a separate Federal Reserve account, whereas SB1373 permits the treasurer to lend assets from the fund, provided that risk is minimised.
Both bills now face an unpredictable fate as they await Democratic Governor Katie Hobbs’s decision. On April 17, Hobbs announced on X her intention to veto every bill until the Republican-controlled legislature delivers a “serious, bipartisan funding solution that safeguards healthcare for Arizonans with disabilities.”
The proposed budget faced sharp criticism, described as “unserious and a complete nonstarter,” with particular emphasis on a $122 million funding shortfall impacting the state’s Division of Developmental Disabilities.
Hobbs has not yet issued a direct statement regarding the crypto bills, but her threat to veto them raises questions about their viability. Recently, she has vetoed 15 bills, establishing herself as the U.S. governor with the highest veto rate in 2024. Arizona’s ambitious cryptocurrency initiative may set a precedent for other states, pending approval from the governor.