The reconsideration motion was filed by Republican Senator Jane Shamp, who had originally voted against the bill. Interestingly, the Senate vote followed mostly party lines, with only Republican Senator Jake Hoffman breaking ranks to oppose the legislation.

What the Bill Proposes

If passed, HB 2324 would allow the state to manage seized digital assets under a newly created reserve fund. According to the bill:

• The first $300,000 worth of seized Bitcoin (BTC) and digital assets would go to the Attorney General’s office.
• Any amount above that would be distributed as follows: 50% to the Attorney General, 25% to the state’s general fund, and 25% to the new reserve fund.

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In addition, the bill seeks to expand Arizona’s forfeiture laws to include digital assets — outlining procedures for seizure, storage, and distribution. The state would be authorized to seize crypto assets in cases where the owner is deceased, deported, fled, granted immunity, or legally untraceable after due diligence.

Governor Hobbs: Supportive Yet Cautious

Governor Katie Hobbs has taken a mixed stance on cryptocurrency legislation. On May 7, she signed HB 2749 into law, which authorizes the creation of a Bitcoin reserve fund that doesn’t rely on taxpayer money. This fund allows the state to stake crypto and collect airdrops for additional yield.

However, she vetoed SB 1025 on May 2 — a proposal that would have allowed Arizona’s treasury to invest up to 10% in Bitcoin and other digital assets. In her veto letter, Hobbs stated that public retirement funds should not be exposed to untested investments.

She also rejected SB 1373 on May 12, which aimed to form a “Digital Assets Strategic Reserve Fund,” again citing high volatility in the crypto markets as a risk to public resources.

What This Means for Crypto Policy

The debate in Arizona highlights a broader trend in the U.S.: balancing innovation in the blockchain space with regulatory caution. If HB 2324 passes the House, it will head to Governor Hobbs’ desk for final approval. The outcome could signal a stronger institutional role for Bitcoin and digital assets in state-level governance.

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Senator and Bitcoin supporter Wendy Rogers, who co-sponsored the bill, reacted strongly: “Bitcoin doesn’t need Arizona. Arizona needs Bitcoin.” The proposal aimed to use seized funds to invest in Bitcoin and create a state-managed crypto reserve.

Crypto Advocates Say Politicians Don’t Understand The Future

Casa co-founder Jameson Lopp responded by saying, “This will age poorly.” Bitcoin advocate Anthony Pompliano commented, “Imagine the ignorance of a politician thinking they can make investment decisions.”

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Attorney Andrew Gordon added, “We need more elected officials who understand that Bitcoin and crypto are the future.” Rogers emphasized that Arizona’s retirement fund already holds MicroStrategy (MSTR) shares, which she described as “basically a leveraged Bitcoin ETF.” The stock rose 32% in April, marking its best performance since November 2024.

Rogers confirmed she would reintroduce the bill in the next legislative session, saying, “Arizona’s Strategic Bitcoin Reserve bill will be back. HODL.”

More States Struggle With Crypto Legislation

Had it passed, Arizona would have become the first U.S. state to create a Bitcoin Strategic Reserve. Instead, it joins other states like Oklahoma, Montana, South Dakota, and Wyoming, where similar efforts have stalled or failed.

Prominent crypto critic Peter Schiff supported Hobbs, stating, “Governments shouldn’t use public funds to speculate on cryptocurrencies.”

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What the Bill Includes

• A reserve fund made of seized digital assets from criminal proceedings.
• The state treasurer can invest up to 10% of the fund in digital assets per fiscal year.
• Loans can be made from the fund to boost returns, as long as risk remains controlled.

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However, Governor Hobbs has recently vetoed 15 bills in one week and pledged to block all legislation until a disability funding bill is passed.

US States in the Bitcoin Reserve Race

Arizona is also advancing SB 1025, a separate bill focused solely on Bitcoin (BTC), allowing public retirement systems and the treasury to allocate up to 10% in BTC.

Other states like Texas, Utah, and New Hampshire have proposed similar legislation. But according to Bitcoin Laws founder Julian Fahrer, Texas may be the first to succeed due to fewer political hurdles.

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The post Arizona Crypto Reserve Bill One Step from Becoming Law! appeared first on Coin Engineer.