Arizona Moves Forward with Crypto Reserve Legislation: Bill Clears Second Reading

Arizona’s groundbreaking cryptocurrency reserve bill has progressed to its third reading, marking a significant milestone in the state’s embrace of digital assets. The proposed legislation, which aims to establish a framework for cryptocurrency reserves, demonstrates Arizona’s proactive approach to blockchain innovation. This development positions the state as a potential leader in crypto-friendly regulation, potentially attracting blockchain businesses and investors. The bill’s advancement reflects growing recognition of digital currencies’ role in modern finance and could set a precedent for other states considering similar measures.

Bill Would Create Fund From Seized Crypto Assets

SB 1373 would create a Digital Assets Strategic Reserve Fund comprised of digital assets seized in a criminal proceeding. The state treasurer would manage this fund and could invest up to 10% of its total amount into digital assets each year.

Under the law, Arizona’s treasurer would also be able to lend the assets of the fund to enhance returns. The lending power is accompanied by the requirement that it should not enhance financial risks.

Governor’s Veto Threat Hangs Over Legislation

The bill’s passage can be derailed even if it clears its last House vote. Governor Hobbs recently threatened to veto all bills until lawmakers enact legislation for disability funding. Her history doesn’t look good for the crypto bill – she has already vetoed 15 bills that landed on her desk this week.

Julian Fahrer, CEO of Apollo and founder of Bitcoin Laws, said SB 1373 will pass the House. However, he intimated it could be merged with another crypto-related bill, SB 1062, that would broaden the definition of legal tender to include cryptocurrency.

ARIZONA’S STRATEGIC #BITCOIN RESERVE BILL PASSES FINAL COMMITTEE

WHAT A TIME TO BE ALIVE!!! pic.twitter.com/OTRohhG5gt

— Vivek(@Vivek4real_) April 17, 2025

Arizona legislators are pushing a second cryptocurrency bill in addition to SB 1373. The Arizona Strategic Bitcoin Reserve Act (SB 1025) is targeted at investing in Bitcoin exclusively and not on a wider group of digital currencies.

This legislation would allow Arizona’s state retirement system and treasury to invest as much as 10% of available funds into Bitcoin investments. SB 1025 passed the House Committee of the Whole on April 1 and now is waiting for its own floor vote.

According to recent legislative advancements, Arizona is at the forefront of multiple states in pursuing cryptocurrency reserve bills. Utah approved Bitcoin bills on March 7 but eliminated the vital provision of a Bitcoin reserve in its third reading.

The Texas Senate passed a similar Bitcoin reserve bill on March 6, and New Hampshire’s House recently passed similar legislation. While Arizona seems to be leading the charge on moving these bills forward, Fahrer thinks the Texas bill has the best shot at becoming law, citing it having encountered the “fewest explicit roadblocks” to date.

These state initiatives are part of an emerging trend of government institutions seeing cryptocurrency as an integral part of their investment portfolios, yet political challenges are yet to be overcome. If signed into law, the bills would signal a paradigmatic shift in how state governments invest and manage digital assets.

Featured image from Pexels, chart from TradingView