Arizona Lawmakers Pass Bills to Create Bitcoin Reserve, Setting the Stage for Nationwide Adoption

Arizona state legislators passed two bills in one day that could make the state the first in the nation to create a Bitcoin reserve, taking a giant leap toward crypto integration into public finance.

Arizona lawmakers have taken a significant step towards integrating Bitcoin into public finance, passing two bills in one day that could make the state the first in the nation to create a Bitcoin reserve. The legislation, which is now pending approval from Governor Katie Hobbs, has sparked heated debate among lawmakers.

The Arizona Strategic Bitcoin Reserve Act (Senate Bill 1025) was passed by the Arizona House of Representatives on Friday, April 28, with a vote of 31 to 25 against. At the same time, Senate Bill 1373, which establishes a Digital Assets Strategic Reserve Fund, was also approved with 37 votes in favor and 19 against.

SB 1025 provides that the state treasurer as well as the retirement system may allocate up to 10 percent of their funds into Bitcoin. If the U.S. Secretary of the Treasury establishes a federal Bitcoin reserve, Arizona may deposit its Bitcoin in a segregated, secure account within the U.S. Bitcoin reserve.

The legislation also includes provisions for managing various digital assets, like Bitcoin, stablecoins, or NFTs. The legislative appropriations and seized crypto assets would sustain the fund with provisions that the funds do not lapse at the fiscal year’s end.

The bills, which had previously cleared the Arizona Senate on February 27, were passed by the House without amendments and are now on their way to be formally transmitted to Governor Hobbs for her final say.

Arizona is also ahead in the race to pass a state level Bitcoin reserve, as represented visually from the Arizona State Legislature, with both bills having passed both legislative chambers.

The other budget issues of concern to Governor Hobbs have led her to weigh whether or not to sign new legislation. Last week, on April 17, she said on her official account that she would not approve any bills until a bipartisan funding solution is reached for health care services for Arizonans with disabilities. “Legislation must wait until we resolve critical funding issues for our most vulnerable citizens,” Governor Hobbs stated.

The position derives from ongoing budget negotiations. Health care funding is important to her administration, and she has already vetoed several bills this session because of unrelated disputes.

The heated debates of the House, as seen in the Arizona State Legislature’s video records from April 28, featured Republican co sponsors of the bills Sen. Wendy Rogers and Rep. Jeff Weninger. Adopting Bitcoin could diversify state assets and spur financial innovation, they argued.

Arizona may make history if it became the first U.S. state to fully incorporate cryptocurrency into its fiscal strategy. This would likely serve as a model for other states, including Texas and New Hampshire, who are investigating such measures.

The bills fit into a growing national interest in cryptocurrency as a state issue, in response to federal action. Earlier this year in January, President Donald Trump signed an executive order for the creation of a Strategic Bitcoin Reserve and a Digital Asset Stockpile, indicating a change in the way governments view digital currencies.

Arizona’s legislation may also open the door for more crypto friendly policies. Bitcoin miners and blockchain node operators have already been protected by the state, which has also proposed that Bitcoin ETFs be introduced into its retirement plan portfolio.