Arizona Has Signed a Law Allowing the State to Claim Ownership of Unclaimed Digital Assets

The governor of Arizona has signed a bill that allows the state to claim ownership of abandoned digital assets, including cryptocurrency, after a three-year period.

Governor Katie Hobbs also vetoed a separate measure that would have permitted Arizona to invest public funds in digital assets like Bitcoin.

After New Hampshire, Arizona is now the second jurisdiction to pass a crypto bill into law.

Process For Abandoned Digital Assets

House Bill 2749 directs that digital assets be considered abandoned if their owners do not respond to communications over a period of three years. These assets must then be delivered to the Arizona Department of Revenue in their original, native form.

This makes Arizona the first state to retain digital assets without converting them to cash. The law passed both legislative chambers with bipartisan support and was led by House Commerce Committee Chairman Jeff Weninger.

Crucially, the legislation grants the state’s qualified custodians the authority to stake the acquired assets or accept any airdropped assets. All such proceeds will be channeled into a newly created Bitcoin and Digital Assets Reserve Fund.

The State Treasurer will manage this fund and be subject to legislative appropriations. According to legislative filings, this structure will serve to both maintain the value of unclaimed digital property and open financial avenues for the state.

Governor Blocks Bitcoin Reserve Proposal

Shortly before signing HB 2749 into law, Governor Hobbs vetoed Senate Bill 1025, a separate proposal to create a Bitcoin reserve. The bill would have allowed Arizona to allocate up to 10% of its treasury and pension assets to Bitcoin and similar digital assets.

In her veto message, Governor Hobbs stated that Arizona’s retirement system remains stable because it relies on tested investment strategies. However, she pointed out that digital assets do not currently meet those standards.

This decision places Arizona in contrast with other states, such as Louisiana, Montana, and Wyoming, which are pursuing similar legislation to invest a portion of state treasury assets into Bitcoin.

Hobbs’ office explained that the governor’s priority is safeguarding the financial security of Arizona’s public funds. They added that these funds should not be placed at risk through exposure to emerging and volatile asset classes.

Other States Take Divergent Approaches

While Arizona advances a custodial model for unclaimed digital assets and integrates it into the state revenue department, other states are navigating different regulatory paths.

In New Hampshire, House Bill 302 recently became law, authorizing the state treasury to hold a limited portion of its reserves in crypto assets. This measure permits the purchase of Bitcoin or other digital currencies with a market capitalization exceeding $500 billion. Currently, Bitcoin is the only asset that qualifies under this threshold.

Meanwhile, Florida has opted to withdraw a related initiative entirely, and House Bill 1557, which would have authorized the state to invest in digital assets, was tabled by the Florida House Appropriations Committee. This move effectively cancels the bill for the year.

In contrast, North Carolina remains engaged in a comparable effort with House Bill 306, which is still pending approval from the state senate. This bill would create a new class of securities to be held by the state treasurer’s office.