Arizona’s ambition to become a hub for digital currency took a leap forward on March 24th as two pioneering bills cleared the state’s House Rules Committee, setting the stage for a full House vote. These companion legislations aim to establish Arizona as a leader in the digital asset space, but they still face a skeptical governor known for wielding her veto pen liberally.
One bill, SB 1373, is designed to create a ‘Strategic Digital Assets Reserve’ using digital assets seized during criminal investigations. This would allow Arizona’s treasurer to manage these assets within a fund that caps annual investments at 10%. To potentially increase returns, the bill also permits the state to loan out these assets, provided it’s done without taking on excessive risk.
The second bill, SB 1025, is laser-focused on Bitcoin, proposing that both the Arizona Treasury and the state’s retirement system could invest up to 10% of their available funds in the cryptocurrency. Adding another layer of security, SB 1025 includes a provision to hold any Bitcoin investments in a separate account within a possible future federal Bitcoin reserve.
With a Republican stronghold of 33-27 in the Arizona House, these bills have a strong chance of passing. However, the ultimate hurdle could be Governor Katie Hobbs, a Democrat who has already vetoed 22% of legislation in 2024—a rate higher than any other state governor. Her history raises questions about whether these digital asset initiatives will gain her signature.
Arizona’s move is part of a broader national conversation around digital asset reserves. Texas, for example, saw its Senate pass a Strategic Bitcoin Reserve Bill (SB-21) on March 6th, although it still needs to navigate the House and the governor’s office. Oklahoma’s HB1203 Bitcoin Reserve Bill also advanced, passing their House on March 25th. In contrast, recent Bitcoin legislation in Utah notably avoided creating a strategic reserve. Meanwhile, Kentucky has charted a different course altogether.
On March 24th, Kentucky Governor Andy Beshear signed the “Bitcoin Rights” bill into law. This legislation, known as House Bill 701, championed by Representative Adam Bowling, aims to legally protect cryptocurrency users by safeguarding their right to self-custody, operate crypto nodes, and use digital assets without fear of discrimination. The bill received unanimous support in both the Kentucky House and Senate before reaching the governor’s desk.