Arizona Takes the Lead in the US Strategic Bitcoin Reserve (SBR) Race

After two bills passed the House of Representatives Commerce Committee vote on March 18. The state now has two active crypto reserve legislations and a legal tender bill

Two Bitcoin strategic reserve bills passed the House Commerce Committee in Arizona on Tuesday, March 18, advancing the state's initiative in the US Strategic Bitcoin Reserve (SBR) race.

The bills, Senate Bill 1025 (SB1025) and Senate Bill 1373 (SB1373), were among three cryptocurrency-related legislations that had a final committee hearing and passed with a 6 – 4 vote on Tuesday, according to Bitcoin.edu.li.

The bills now advance to the House Rules Committee, which has a 5 – 3 Republican majority, for a vote that could occur as early as next week.

House Commerce Committee Passes Bitcoin Reserve Bills

The two strategic reserve bills were largely expected to pass the House committee, considering they passed the Senate with bipartisan support.

The bills aim to allow public funds in Arizona to invest a portion of their assets in cryptocurrencies, focusing on Bitcoin (BTC).

SB1025, also known as the “Arizona Strategic Bitcoin Reserve Act,” was sponsored by Republican Senator Wendy Rogers and passed the vote with a 6 – 4 majority, with the vote falling along partisan lines: Republicans for; Democrats against, Bitcoin.edu.li noted.

The legislation seeks to create a framework for public funds to diversify their investments and provides clear guidelines and definitions to manage them. It also mentions that if the United States Secretary of the Treasury establishes a strategic Bitcoin reserve for the storage of government Bitcoin holdings, a public fund may store the virtual currency holdings of the public fund in a secure segregated account within the strategic Bitcoin reserve.

Meanwhile, SB1373, sponsored by Republican Senator Mark Finchem, passed with a 6 – 4 vote on Tuesday. The bill aims to establish a Digital Assets Strategic Reserve Fund in the state, comprised of seized cryptocurrencies and appropriated legislative funds that can be held through secure custody solutions or exchange-traded products (ETPs).

The fund would be managed by the state treasurer, who could invest up to 10% of its total deposit in any fiscal year and may loan its assets to generate additional returns if it doesn't increase the state’s financial risks.

The bill also outlines strict requirements for secure custody solutions, including exclusive key access, encrypted environments, hardware maintenance in multiple secure data centers, multi-party governance, comprehensive logging, regular security audits, and disaster recovery protocols.

The third bill that passed the House committee on Tuesday was Senate Bill 1062 (SB1062), also sponsored by Senator Finchem. The bill aims to expand the state's definition of legal tender to include cryptocurrencies, including BTC, alongside traditional currencies.

The legislation updates different sections of Arizona's tax code to include the new legal tender definition and ensure consistency across different statutes, suggesting an effort to recognize the industry as a key sector.

The bill, which passed with a 6-4 vote, heads to the next legislative stage.

After Utah Scraps BTC

The two strategic bills passed in Arizona come after Utah exited the SBR race this month.

The state Senate scrapped a proposed bill that would have allowed the state treasury to invest in digital assets.

A House version of the bill, which passed in February, included a clause that would have granted the state treasurer the power to invest in digital assets. However, the Senate amended the bill to remove this clause during the third reading on March 8.

The bill, which focused on diversifying state investments, was ultimately passed by the Senate and now heads to the governor's desk for approval.

After this development, Arizona took the lead with two strategic bills passed by the Senate and now advancing in the House. Both bills passed the Senate Commerce Committee in February and had a final vote in the Senate.

The bills, which were largely expected to pass, now head to the House Commerce Committee for a final vote before moving to the governor's desk.