Key Takeaways:

• Arizona’s Senate passed two bills pushing the state closer to establishing a crypto reserve.
• The bills aim to manage seized crypto and explore crypto investments for public funds.
• Arizona is in the final stages of approval, positioning it among leading states in the crypto reserve race.

Arizona is making significant moves in the crypto space. The Arizona Senate approved two significant bills seeking to create a strategic crypto reserve, which have now been sent to the House of Representatives. This places Arizona alongside Utah in the race to pass legislation in US states allowing crypto to be used as an investment tool.

Arizona Jumps to 2nd Place in the Race to Adopt Crypto as a Reserve Asset

🇺🇸 ARIZONA BITCOIN RESERVE BILL PASSES THE SENATE

SO CLOSE! GO ARIZONA 🚀 pic.twitter.com/cgiSWlwwi7

— The Bitcoin Conference (@TheBitcoinConf) February 28, 2025

SB 1373: Creating a “Digital Assets Strategic Reserve Fund”

The first, SB 1373, the Strategic Digital Assets Reserve bill, was sponsored by Republican Senator Mark Finchem. It passed in the Senate on February 27th by a vote of 17-12. At the heart of this bill is the establishment of a so-called “Digital Assets Strategic Reserve Fund,” which would be controlled by the state treasurer. This fund would be funded by appropriations from the legislature, and, interestingly, by cryptocurrency that the state seizes in law enforcement actions.

The bill takes a cautious approach to managing these assets. The state treasurer may invest up to only 10% of the fund’s total deposits in any fiscal year. That said, the treasurer can provide loans of digital assets from the fund to produce returns, so long as the loans do not pose undue financial risks to the state. This builds on a balanced approach to harnessing digital assets for the good of Arizona’s economy.

SB 1025: The Strategic Bitcoin Reserve Act

In a similar vein, barely behind SB 1373, Strategic Bitcoin Reserve Act (SB 1025) passed the Senate on February 27th by a 17-11 vote. And this legislation, sponsored by Republicans State Senator Wendy Rogers and State Representative Jeff Weninger, offers a different route. It seeks to enable public funds to invest in crypto assets via investment authority. This is another big step in the state’s broader investment strategy with cryptocurrency.

First, as evidenced by the approaches taken in both bills, it is important to highlight:

• SB 1373 recommends the creation of a dedicated fund, intended for the management of seized digital assets and funds appropriated by the legislature.
• SB 1025 expands potential investment options for public funds to include crypto assets.

It presents two paths which, while not mutually exclusive, give Arizona the ability to create a comprehensive map in this often murky world of digital assets.

National Effort: Crypto Reserve Proposals Are on the Rise

Arizona is not the only state to reckon with crypto reserves. The number of US states with crypto reserve bills waiting for a Senate vote is currently 18. There are also others considering similar legislation, with Arizona and Utah leading in the process at this point. And yet bills to invest in crypto have been turned down in Montana, Wyoming, North Dakota, South Dakota and Pennsylvania, showing the differing degrees of acceptance and understanding in different regions.

More News: Utah on the Verge of Senate Approval for Bitcoin as Reserve Asset

UTAH’S BITCOIN RESERVE BILL MOVES TO THE SENATE

Utah’s HB230, also known as the Blockchain and Digital Innovation Amendments bill, has advanced from the House Economic Development Committee to the Senate standing committee.

The legislation proposes allowing the state treasurer… pic.twitter.com/MQWFcgOYv3

— Crypto Town Hall (@Crypto_TownHall) February 19, 2025

The proliferation of these proposals reflects a growing understanding of the potential of cryptocurrency both as an asset class and as an economic development tool. This trend is partly driven by increasing political interest, including figures like Donald Trump, alongside broader policies positioning the US as a major player in crypto.

Consider, for instance, El Salvador’s decision to make Bitcoin legal tender, although controversial, has certainly ignited a global debate on the function cryptocurrency has in national economies. Conversely, China’s blanket ban on cryptocurrency trading and mining currency has demonstrated a far-reaching end of wide variety and regulatory alternatives which might be gaining momentum worldwide.

Economic Considerations & The Volatility of Crypto

It is important to acknowledge the volatility of the cryptocurrency market. Bitcoin, for example, has seen huge price volatility in recent weeks. In fact, Bitcoin has crashed by 17% over the last week alone according to recent reports, being unable to hold on to gains during a time of economic turmoil. Part of it can be linked to concerns about possible tariffs, which can undercut international trade flows and investors.

The potential for dramatic price fluctuations creates a need for a cautious and well-regulated approach to crypto reserves. And provisions such as a 10% investment cap, such as SB 1373 proposes, as well as an emphasis on minimizing financial risks, are responsible approaches to mediating the risks inherent to this type of investment.

Arizona’s Crypto Bills: What’s Next?

The two bills will go to the Arizona House of Representatives, where they will be debated and scrutinized further. The fate of these bills is significant because their passage would have repercussions for Arizona’s economy as well as its status on the national crypto map. If the bills are signed into law, Arizona would become one of the earliest states in the US to adopt a formal strategy toward governing and utilizing digital assets.

The fact that bills like these, and others across the country, generate discussions nearly as much as Bitcoin’s price fluctuations highlights a key question: How can states utilize the virtues of cryptocurrency without damaging the needs of their citizens and economies? The happenings in Arizona provide what’s shaping up to be a fascinating case study as the country wrestles with this new technology.

Legislative Impact

On February 28th Dennis Porter, the founder of Satoshi Action Fund, shared his perspective on X with this post in which he posited that, “[Whether] you like it or not, legislation will happen at the federal level in this order: Stablecoins, Market Structure, and Strategic Bitcoin Reserve.” His declaration shows a certainty that strategic bitcoin reserves are going to be enacted at the federal level.