The Bill to Make Crypto a Reserve Asset is Rejected

The bill, called the “Digital Assets Strategic Reserve,” which was passed by the Arizona Senate, allowed the state to invest a portion of its seized funds in Bitcoin and other digital assets. However, the bill was officially vetoed by Governor Hobbs on May 2nd.

In her statement, Hobbs explained:

“Today, I vetoed Senate Bill 1025. The Arizona Retirement System is one of the strongest in the nation because it makes careful and informed investments. The retirement savings of Arizona citizens are not the place to experiment with speculative digital assets.”

Despite the veto, the bill had passed its final vote in the House on April 28, with 31 votes in favor and 25 votes against.

Another Crypto Bill Awaits Final Vote

Another bill, SB1373, which proposes to allocate up to 10% of Arizona’s rainy-day fund into digital assets like Bitcoin, has not yet reached a final vote. This bill is closely related to the previous one and is still under consideration in the state legislature.

Arizona joins other states where similar attempts have failed. Recently, similar proposals in Oklahoma, Montana, South Dakota, and Wyoming were either withdrawn or failed to pass through the legislature.

Some States Open to Crypto Investments

Despite this setback, some states are taking a different approach. North Carolina passed a new law on April 30 that allows the state treasurer to invest up to 5% of certain funds in approved cryptocurrencies. The bill is now under review by the state Senate.

At the federal level, similar proposals are being discussed. President Donald Trump and some Republican senators have proposed the creation of a “Strategic Bitcoin Reserve” within the U.S. Treasury. A presidential order signed in March included plans to establish a stockpile of digital assets.

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Important Step for Bitcoin in Arizona: Bitcoin Strategic Reserve Bill SB1373

The Arizona House of Representatives’ Commerce Committee passed the Bitcoin Reserve Bill SB1373 with a 6-4 vote. The approval of this bill marks a significant step in the state’s approach to cryptocurrency management and regulation.

The passage of the bill strengthens Arizona’s stance on adopting Bitcoin and other digital assets. SB1373 may enable the state to explore supporting certain financial reserves with Bitcoin. It is seen as a critical development for broader legal regulations that could allow the use of cryptocurrencies in public funds and economic strategies.

This move demonstrates Arizona’s proactive attitude toward financial innovation and the adoption of digital assets. The progress of this legislation in the state Senate and beyond will continue to be an important development for the crypto markets.

What’s Included in SB1373?

SB1373 allows the creation of a Digital Assets Strategic Reserve Fund. This fund will consist of appropriated amounts by the state legislature and digital assets seized by the state. The state treasurer will manage the fund, and digital assets will be invested in secure custody solutions by a qualified custodian or a registered investment company within the state.

The bill restricts the investment to no more than 10% of the total fund each year. Additionally, digital assets may be loaned, but it must be managed in a way that does not increase financial risks. Digital assets are defined as virtual currency, coins, Bitcoin, stablecoins, NFTs, and other digital assets conferring economic, proprietary, or access rights.

The bill imposes stringent security measures for the safekeeping of digital assets. Cryptographic private keys must only be known by state officials, stored in secure data centers, and require a multi-user management system. These provisions set high security standards for the protection and management of digital assets.

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