Arizona Bill Would Allow 10% State Fund Investment in Bitcoin

TLDR

• Arizona Senate Finance Committee approved bill SB1025 allowing 10% of state funds to be invested in Bitcoin
• Trump administration shows openness to establishing a federal Strategic Bitcoin Reserve
• Scott Bessent, new Treasury Secretary, supports Bitcoin while opposing central bank digital currency
• 11 states have introduced Bitcoin reserve bills as of January 2025
• The bill includes a 10% investment cap and secure storage requirements

The Arizona Senate Finance Committee voted 5-2 on January 27, 2025, to approve a bill that would allow the state to invest up to 10% of its public funds in Bitcoin. The legislation, known as SB1025 or the “Arizona Strategic Bitcoin Reserve Act,” represents a potential milestone in state-level cryptocurrency adoption.

State Senator Wendy Rogers and Representative Jeff Weninger co-sponsored the bill, which would enable Arizona’s state treasurer and retirement systems to include Bitcoin in their investment portfolios. The proposed legislation establishes clear guidelines for managing these digital assets, including requirements for secure storage in segregated accounts.

The bill’s advancement comes as other states explore similar initiatives. Dennis Porter, who leads the Satoshi Action Fund, reports that eleven states have already introduced their own Bitcoin reserve bills. Porter’s research suggests this number could grow to 16 states in the near future.

Scott Bessent’s recent confirmation as Treasury Secretary has added momentum to state-level Bitcoin initiatives. The Senate confirmed Bessent with a 68-29 bipartisan vote. He has expressed support for Bitcoin while taking a stance against developing a central bank digital currency.

The Trump administration has shown increasing interest in cryptocurrency regulation. Last week, President Trump signed an executive order aimed at creating a comprehensive regulatory framework for digital assets and establishing a digital asset reserve. However, the order did not specifically address Bitcoin.

If SB1025 receives full approval, Arizona would become the first U.S. state to officially invest public funds in Bitcoin. This would mark a substantial change in how states approach cryptocurrency as part of their investment strategy.

The bill’s path forward includes several steps. After the Senate Finance Committee’s approval, it moves to the Senate Rules Committee, which will set parameters for floor debate and amendments. Following this, the full Senate must vote on the legislation before it can advance to the House of Representatives.

Arizona has previously explored Bitcoin integration into its financial system. Senator Rogers introduced legislation in 2022 proposing to make Bitcoin legal tender in the state, though that bill has not advanced substantially.

The current legislation includes a 10% cap on Bitcoin investments, reflecting a cautious approach to incorporating cryptocurrency into state funds. This limitation aims to balance potential opportunities with risk management considerations.

Porter emphasized the historic nature of the committee’s approval, noting that Arizona leads other states in advancing Bitcoin reserve legislation through the legislative process. This progress could encourage other states considering similar measures.

The bill includes provisions for potential integration with a federal Strategic Bitcoin Reserve, should one be established during Trump’s term. This forward-looking element allows Arizona to align its state initiatives with possible federal frameworks.

State officials have outlined specific security measures for managing digital assets under the proposed law. These include requirements for cold storage, multiple signatures for transactions, and regular security audits.

The legislation addresses various technical aspects of Bitcoin custody, including requirements for private key management and backup procedures. It also establishes guidelines for selecting qualified custodians to manage the state’s digital assets.

The bill requires regular reporting on the performance and status of Bitcoin investments to ensure transparency and accountability. These reports would be available to the public and subject to review by state oversight committees.

As of January 2025, the most recent development shows the bill advancing to the Senate Rules Committee with strong support from cryptocurrency advocates and some state financial officials.

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