Arizona poised to set up a Bitcoin reserve

The Arizona House of Representatives has approved two bills (SB1373 and SB1025) paving the way for the creation of a Bitcoin reserve.

The Arizona House of Representatives has approved two bills (SB1373 and SB1025) that pave the way for the creation of a Bitcoin reserve. Now all eyes are on Governor Katie Hobbs's signature, per data from Bitcoin-Laws and the Bloomberg newswires.

With this step, Arizona could become the first U.S. state to officially invest state funds in Bitcoin.

Specifically, the bill SB1373 creates a strategic reserve fund for digital assets that would be held by the state treasury. The state treasurer would have the authority to invest up to 10 percent of the fund annually in Bitcoin and other digital assets. Lending of these assets would also be allowed, as long as it does not introduce additional risk.

SB1025 goes a bit further and gives the state treasurer and Arizona's pension funds the simple power to put up to 10 percent of their available resources into Bitcoin and other digital assets.

Whether Governor Hobbs will actually sign the laws remains uncertain. Hobbs is a member of the Democratic Party, which in the past has often taken a skeptical stance toward Bitcoin and other cryptocurrencies, and has supported laws that hinder adoption of the technology. Bloomberg notes that Hobbs is also known for regularly vetoing bills from the Republican majority in the legislature.

Yet Hobbs does not appear to be a vociferous crypto opponent. According to Coinbase's Stand with Crypto initiative, which rates politicians on their attitude toward cryptocurrencies, Hobbs is not seen as strongly pro- or anti-crypto. The ranking ranges from "strongly opposed" to "highly supportive".

In other states, efforts to set up a Bitcoin reserve have fallen short. Oklahoma recently withdrew from the race.

If Arizona's legislation does proceed, the state could potentially invest billions of dollars in Bitcoin and other digital assets. The Arizona state treasury's website notes that by the end of 2024 it managed about $31.4 billion in assets. A 10 percent allocation would amount to roughly a $3.14 billion investment.