According to cryptocurrency journalist Colin Wu, Arizona’s House of Representatives Committee has passed the Senate Bill 1373 (SB 1373), through which the state will establish a Strategic Digital Asset Reserve Fund. The bill is currently awaiting its final vote from the White House and the governor’s signature, after which the bill will be integrated into the state financial management.
Key Provisions of SB 1373 Bill
SB 1373 allows the state to create a fund that uses seized digital assets from criminal cases, alongside legislative appropriations. This fund will support various state initiatives as well. Arizona’s fund is currently managed by the State Treasurer and the same will also take care of the seized digital assets with licensed custodians.
With this bill the Treasurer can invest up to 10% of the funds in digital assets like Bitcoin, stablecoins and NFTs to generate income while managing any risks.
Moreover, the State Treasurer has the power to lend out these digital assets to others. This lending is only possible if it is through approved channels to earn extra income, while making sure that the state’s financial risk is controlled.
Uncertainty around the Bill
Even though the bill has made significant progress, there is no guarantee that the bill will be passed in this final stage. Governor Katie Hobbs has pointed that there could be a potential opposition, having pledged to veto legislation until the lawmakers address disability funding.
Governor Katie Hobbs has already vetoed multiple bills in this legislative session, which adds another layer of uncertainty to SB 1373’s future.
State Reserve Race
This step by Arizona’s government is a part of a bigger campaign which includes other states as well. As highlighted by a well-known Youtuber Crypto Rover, Arizona is currently leading the State Reserve Race and stands out among States like New Hampshire and Texas.
Arizona has proposed two bills which include the SB 1371 which focuses on creating a fund to manage seized cryptocurrencies and the second bill that has been approved is SB 1025 which focuses on establishing a state-backed Bitcoin reserve. Both of them now seek a final approval before being incorporated in the financial system of the state.
If approved, both of these bills SB 1373 and SB 1025 may become a significant step in legitimizing digital assets in public finance, and can make Arizona the first state to formalize such reserves.
