Arizona’s Digital Asset Reserve Bills Move Forward, But Governor’s Veto Threat Looms

Two bills, which aim to establish digital asset reserves in Arizona, cleared the state’s House Rules Committee on March 24th and have now advanced to the House floor for a full vote.

The proposed legislation includes the Strategic Digital Assets Reserve Bill (SB 1373) and the Arizona Strategic Bitcoin Reserve Act (SB 1025), which is expected to position Arizona as the first state to create a strategic digital asset reserve.

Arizona’s Digital Asset Legislation

SB 1373 seeks to create a reserve fund composed of digital assets seized during criminal investigations. Such a move would allow the state treasurer to manage the assets. This fund would be capped at a 10% annual investment rate, with the added provision that assets may be loaned to enhance returns, so long as the transactions do not introduce undue risk.

On the other hand, SB 1025 focuses specifically on Bitcoin and proposes that the Arizona Treasury and the state’s retirement system be permitted to invest up to 10% of available funds into the cryptocurrency. This bill also includes a clause to secure any BTC investments in a segregated account within a potential federal Bitcoin reserve.

The 33-27 Republican majority in Arizona’s House of Representatives increases the likelihood that the two bills will pass. However, uncertainty exists as they require the approval of Governor Katie Hobbs, a Democrat known for her frequent vetoes. In 2024, Hobbs vetoed 22% of legislation, the highest rate among all state governors, raising questions about whether these bills will garner her support.

Similar efforts in other states include Texas’ Senate passing the Strategic Bitcoin Reserve Bill (SB-21) on March 6 with a 25-5 vote, though it still needs to clear the House and gain the governor’s signature.

Meanwhile, Utah’s recent Bitcoin legislation excluded the creation of a strategic reserve, while Oklahoma’s HB1203 Bitcoin Reserve Bill passed the House on March 25 by a 77-15 vote.

Kentucky Gov Signs “Bitcoin Rights” Bill Into Law

Kentucky Governor Andy Beshear has officially signed the “Bitcoin Rights” bill into law, providing legal protection for cryptocurrency users. The measure, House Bill 701, safeguards the right to self-custody, run a crypto node, and use digital assets without fear of discrimination.

The bill was introduced by Rep. Adam Bowling in February this year and passed the state House and Senate with unanimous support before being signed by Beshear on March 24.