Arizona’s Digital Asset Strategic Reserve Act Set for Third Reading, but Concerns Arise Over Potential Legislative Hurdles from the Governor

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Arizona’s Digital Asset Strategic Reserve Act

The Arizona Digital Asset Strategic Reserve Act (SB 1373) passed the House committee review on Thursday and is currently awaiting a third reading and a vote by the full legislature before it is sent to the governor for signature.

SB 1373 aims to establish a “Digital Asset Strategic Reserve Fund,” which will be sourced from appropriations by the state legislature and cryptocurrency assets seized by authorities. The bill specifies that the state treasurer may deposit seized cryptocurrency assets into this fund through qualified custodial solutions or state-registered cryptocurrency ETPs. Additionally, the treasurer can lend the digital assets in the fund to earn additional revenue.

However, the bill also sets limits on the amount of investment:

“The state treasurer may not invest more than 10% of the total fund in any fiscal year.”

According to the definition in SB 1373, “digital assets” include virtual currencies, tokens, and cryptocurrencies, covering Bitcoin, stablecoins, non-fungible tokens (NFTs), and other blockchain assets that have economic value or access rights.

Related Progress and Background

Another proposal, the Arizona Bitcoin Strategic Reserve Act (SB 1025), also passed the House on April 1. If this bill is ultimately approved, the state government would be able to invest up to 10% of public funds in virtual currency holdings.

However, both cryptocurrency reserve proposals in Arizona currently face significant political obstacles. Governor Katie Hobbs has previously stated that she will veto all other bills until the legislature passes a funding allocation bill for individuals with disabilities.

Currently, multiple state governments in the United States are advancing legislation related to cryptocurrency assets. According to data from the Bitcoin legislative research platform Bitcoin Laws, Arizona is making the fastest progress in advancing digital asset reserve legislation, followed by Texas and New Hampshire.

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