Arizona renews push to establish a Bitcoin reserve

The Arizona Senate has voted to revive a previously defeated bill to establish a state-managed Bitcoin reserve fund, breathing new life into the state’s ongoing push to integrate digital assets into government financial systems.

House Bill 2324, which was originally rejected in the House during its third reading on May 7, was brought back for reconsideration. The Senate passed a motion in a narrow 16-14 vote on Thursday. The bill will now return to the House for another vote.

Arizona lawmakers renew push to establish state-backed Bitcoin reserve fund

HB 2324 proposes creating a “Bitcoin and Digital Assets Reserve Fund” to manage digital assets acquired through criminal forfeitures. The bill, introduced by Republican Senator Jeff Weninger, is part of a broader push in the Arizona Legislature to regulate and integrate digital assets into public policy.

Under the bill’s provisions, the first $300,000 worth of forfeited digital assets would be allocated to the Attorney General’s Office. At the same time, any amount above that would be split — 50% to the AG, 25% to the general fund, and 25% to the newly established reserve fund.

The Senate vote on reconsideration followed partisan lines, with Republican Senator Jake Hoffman as the lone GOP member to oppose the measure. The motion was filed by Senator Janae Shamp, who originally voted against the bill — a requirement under Arizona legislative rules.

To advance, the bill now needs a majority vote in the House, which has 60 members — 33 of whom are Republicans — before it can be sent to Governor Katie Hobbs for final approval.

Hobbs greenlights crypto reserve without taxpayer risk

Governor Hobbs seems to be picking and choosing her approach to crypto legislation. On May 7, she enacted HB 2749 into law, which permits the state to hold onto unclaimed cryptocurrency and establish a Bitcoin reserve without relying on taxpayer funds. It also allows the state to stake crypto holdings and to participate in airdrops; any proceeds would be deposited in the reserve fund.

However, Hobbs vetoed two other crypto bills in May. She vetoed SB 1025 on May 2nd. The bill was intended to develop the “Arizona Strategic Bitcoin Reserve Act,” and authorize the state treasurer to invest as much as 10% of the treasury’s assets in cryptocurrencies. She was worried that the public funds would be risked in volatile investments. She also rejected SB 1373, which would have created the “Digital Assets Strategic Reserve Fund,” on May 12.

“Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars,” Hobbs wrote in a veto letter. “I have already signed legislation this session allowing the state to utilize cryptocurrency without putting general fund dollars at risk.”

HB 2324 would also update Arizona’s asset forfeiture laws to include digital assets if passed. The bill outlines procedures for the seizure and custody of crypto assets under specific conditions, such as when the owner is deceased, deported, or cannot be identified after diligent efforts.

The upcoming House vote will determine whether Arizona will take another step forward and become one of the most crypto-forward states in the US.

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