Arizona Moves Closer to Holding Crypto in State Reserves

Arizona's Strategic Digital Assets Reserve Bill (SB 1373) is gaining momentum. The bill passed the House committee on Thursday and now awaits a full floor vote.

Arizona's Strategic Digital Assets Reserve Bill (SB 1373) is moving forward after passing a House committee on Thursday. The bill, which would create a state-managed crypto reserve backed by legislative funds and seized digital assets, is now headed for a full floor vote.

If approved by the House, the bill will then return to the governor's desk for final sign-off.

The proposed law aims to give Arizona a financial edge in the growing blockchain economy by investing in and managing a portfolio of cryptocurrencies and other digital assets.

The bill defines "digital assets" broadly—covering Bitcoin, stablecoins, NFTs, and other blockchain-based tokens that have financial or access-related value.

The state treasurer will be able to hold the seized digital assets in either a qualified custody solution or a state-registered exchange-traded product. The treasurer can also lend out digital assets from the reserve to generate yield.

However, there's a cap on the total amount that can be invested in any fiscal year—no more than 10% of the total reserve.

Arizona Also Eyes Bitcoin-Specific Reserve

This isn't Arizona's only foray into the crypto space. A second bill, SB 1025, passed the House earlier this month. That bill, dubbed the Arizona Strategic Bitcoin Reserve Act, would allow the state to invest up to 10% of its funds directly into virtual currency holdings, with a particular focus on Bitcoin.

The bill provides the state treasurer with the authority to invest in cryptocurrencies and other digital assets, taking into account factors such as market conditions, liquidity, and risk management.

If both measures pass, Arizona could become a pioneer in state-level crypto treasury management, potentially paving the way for other U.S. states to follow suit.