Arizona Advances the Strategic Bitcoin Reserve Act, Permitting up to 10% of Public Funds to Be Invested in $BTC and Digital Assets

The proposed legislation now heads to the Senate Rules Committee, where it will undergo further discussions and amendments before a final vote in the Senate.

Arizona Lawmakers Advance Bill to Establish State-Level Bitcoin Reserve

Arizona policymakers have made progress on a proposal to establish a state-level Bitcoin reserve. The Strategic Bitcoin Reserve Act (SB1025), sponsored by Senator Wendy Rogers and Representative Jeff Weninger, received approval from the Arizona State Senate Finance Committee on January 27, passing with a vote of five to two.

The proposed legislation now heads to the Senate Rules Committee, where it will undergo further discussions and amendments before a final vote in the Senate. If passed, the bill will move to the House of Representatives for consideration.

The bill outlines plans for creating a strategic BTC reserve under the U.S. Treasury to securely store government-held Bitcoin. It also proposes extending this facility to other public funds, which would be able to store digital assets in a designated and segregated account within the reserve.

Arizona advances the Strategic Bitcoin Reserve Act, permitting up to 10% of public funds to be invested in $BTC and digital assets

One of the key provisions in the bill allows government entities and public funds to allocate up to 10% of their capital to Bitcoin and other digital currencies. Pension funds could also utilize this framework to diversify their investments, potentially broadening the appeal of cryptocurrencies as a financial asset.

The growing interest in cryptocurrency-backed retirement plans is evident among younger generations. According to a recent report, “Up to 20% of Gen Z and Alpha are already open to receiving pensions in cryptocurrency, while 78% expressed greater trust in ‘alternative retirement savings options’ over traditional pension funds.”

Anndy Lian, a blockchain expert and author, suggested the move could influence other states. “Imagine if your state decided to put some of your tax dollars into Bitcoin; it might encourage places like Texas or Pennsylvania, where they’ve already been talking about similar ideas, to jump on the bandwagon quicker,” Lian said.

Despite the potential benefits, Lian noted that the volatility of cryptocurrencies presents risks. “Taxpayers could face financial risks similar to those encountered by crypto investors,” he cautioned, emphasizing the need for adequate safeguards if such a reserve is implemented. The bill's progress marks a significant step in Arizona's exploration of BTC as a strategic financial asset.