Arizona Approves First U.S. Bitcoin Reserve, Eyes 10% State Investment
A 10% allocation, as permitted under SB 1025, would allow for up to $3.14 billion to be invested in digital assets, including Bitcoin.
Quick overview
- Arizona lawmakers have passed two bills allowing the state to invest up to 10% of its treasury and pension funds in Bitcoin and other digital assets.
- If signed by Governor Katie Hobbs, Arizona would become the first U.S. state to establish a Bitcoin reserve, potentially setting a precedent for national adoption of digital assets in public finance.
- The legislation includes the creation of a Strategic Reserve Fund for Digital Assets, which will hold seized crypto and future allocations with on-chain audit requirements.
- With a potential investment of up to $3.14 billion, Arizona could become the second-largest public institutional holder of Bitcoin in the U.S.
Arizona’s legislative approval marks a potential milestone in the institutional adoption of Bitcoin in the United States, opening the door for a state to formally integrate digital assets into its public treasury.
In a key move toward public adoption of Bitcoin, Arizona lawmakers have passed two bills authorizing the direct investment of public funds in digital assets. With this step, Arizona is on track to become the first U.S. state to establish a Bitcoin reserve.
On Monday, the Arizona House of Representatives passed Senate Bills 1025 and 1373, which pave the way for allocating up to 10% of the state’s treasury and pension funds into Bitcoin and other digital assets.
The legislation—now awaiting Governor Katie Hobbs’ signature—would empower the State Treasurer to invest up to 10% of state-managed assets in digital currencies. It also establishes a Strategic Reserve Fund for Digital Assets to hold seized crypto and future allocations, with on-chain audit requirements and standardized risk controls.
Arizona’s initiative aligns with similar legislative efforts in Texas, Florida, and New Hampshire, where state governments are exploring Bitcoin-backed reserves to attract blockchain innovation and diversify public asset portfolios. If enacted, Arizona would become the first U.S. state to hold Bitcoin in its public treasury—a potential precedent for national-level integration of digital assets in public finance.
Bitcoin Market Impact
Following the vote, Bitcoin hovered around $95,000, having rebounded 25% from early-April lows. Renewed institutional interest—highlighted by Arizona’s move to validate Bitcoin as a sovereign reserve asset—is fueling market momentum.
While Governor Hobbs recently reduced the threat of a veto over separate disability funding disputes via a bipartisan deal on April 24, she has yet to comment on her stance regarding the crypto-related bills.
Her signature would trigger immediate implementation, while a veto would stall the legislation and freeze related budget allocations.
How Much Could Arizona Invest in Bitcoin?
Arizona manages substantial public assets. According to official data, the State Treasury oversaw more than $31.4 billion in assets in 2023. A 10% allocation, as permitted under SB 1025, would allow for up to $3.14 billion to be invested in digital assets, including Bitcoin and blockchain-based NFTs.
The legislation limits investment to highly liquid, secure instruments like Bitcoin and certain non-fungible tokens, while mandating compliance with standard fiduciary risk management protocols to safeguard public funds against volatility and custody risks.
A fully implemented $3.14 billion reserve could translate to roughly 31,000 BTC—instantly making Arizona the second-largest public institutional holder of Bitcoin in the U.S., surpassing corporations like Tesla and Marathon Digital.
Looking ahead, Arizona’s move could serve as a model for other states—and even foreign governments—seeking modern strategies to strengthen public reserves.
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