Arizona state legislators have passed two bills, Senate Bill 1025 and Senate Bill 1373, allowing the state to invest public funds in digital assets, including Bitcoin.
These bills permit the allocation of up to 10 percent of state-managed assets into such investments.
Digital Asset Reserve Fund Created
The legislation also creates a Digital Assets Strategic Reserve Fund.
This fund will hold seized digital assets and any future appropriations for this purpose.
The bills specify requirements for on-chain auditability and standardized risk controls for these investments.
Gubernatorial Approval Required
The House of Representatives approved the Senate bills, which now await Governor Katie Hobbs’ final decision.
If the governor signs the bills, Arizona’s treasurer will gain the authority to proceed with these digital asset investments.
This action would potentially make Arizona the first U.S. state to formally hold Bitcoin in its treasury reserves.
Investment Potential and Criteria
Based on 2023 data, Arizona’s treasury oversees over $31.4 billion in assets.
A 10 percent allocation would allow for investments up to $3.14 billion.
The eligible assets include Bitcoin and specified non-fungible blockchain-based assets that meet criteria for high liquidity and security.
The investments must also adhere to standard fiduciary risk management protocols.
Potential Scale of Bitcoin Holdings
A full $3.14 billion investment in Bitcoin could acquire approximately 31,000 BTC at recent prices.
This would make Arizona a larger holder of Bitcoin than major corporations like Tesla and Marathon Digital among U.S. public entities.
Decision Pending Amid Wider Context
Governor Hobbs has not yet indicated whether she will sign the bills.
A signature allows the allocation process to begin, while a veto would stop the initiative.
Similar digital asset or Bitcoin reserve strategies are reportedly being considered in states like Texas, Florida, and New Hampshire.
Market observers view Arizona’s legislative action as a potential precedent for other states and public entities considering digital assets for reserve diversification.
