Arizona Establishes Bitcoin Reserve Fund, Following New Hampshire's Lead

Arizona Governor Katie Hobbs has signed House Bill 2749 into law, establishing a Bitcoin and Digital Assets Reserve Fund. This makes Arizona the second state in the US to create such a framework, following a veto of a separate crypto-related bill by Hobbs just days prior. The new law, supported by Representative Jeff Weninger with bipartisan backing, updates Arizona’s unclaimed property laws to include digital assets and sets up a state-managed reserve fund for holding and potentially growing these assets.

The state treasurer will oversee the reserve fund, which will include digital assets acquired through airdrops, staking rewards, and interest. A qualified custodian may actively stake these assets to generate returns for the state. Rewards earned on unclaimed digital assets held for three years will be deposited into the new fund. The law allows for the transfer of 10% of certain digital assets to Arizona’s general fund with legislative approval, but specifically prohibits Bitcoin from such transfers, preserving it as a strategic reserve.

The legislation also updates the Arizona Revised Statutes to recognize digital assets as a distinct property class. These assets are considered abandoned after three years of inactivity, unless owners take specific actions such as logging in or transacting. This move by Arizona comes at a time when various regions in the US are considering the adoption of crypto reserves. New Hampshire, for instance, has already made history by becoming the first state to pass a Strategic Bitcoin Reserve Bill into law. The HB 302 Bill, introduced by Rep. Keith Ammon, allows the state to hold up to 5% of its funds in digital currencies, with Bitcoin being the primary asset. This legislation mandates that the Bitcoin in the reserve must be kept in a state-controlled Multisig with a qualified custodian, ensuring secure holding of the assets. Additionally, the state can gain exposure to Bitcoin through exchange-traded funds (ETFs).

The move by New Hampshire sets a precedent for other states considering similar measures. While Florida and Arizona have taken different approaches to their respective Bitcoin Reserve Bills, with Arizona's Governor Katie Hobbs vetoing the legislation, New Hampshire's proactive approach highlights the growing interest in digital assets as a reserve asset. This development could pave the way for other states to follow suit, potentially leading to a broader acceptance of Bitcoin and other digital currencies in the financial landscape.

The Strategic Bitcoin Reserve Bill in New Hampshire was introduced in January and gained momentum as the House assented in March. The law will not take effect until 60 days after Governor Ayotte's signature, providing ample time for implementation and preparation. This move by New Hampshire complements the ongoing discussions at the federal level regarding crypto adoption. President Donald Trump had previously signed an Executive Order to establish a national crypto reserve, although there have been no major updates on this front. The Federal government has not committed taxpayers' money into Bitcoin, unlike New Hampshire's proactive approach.

Dennis Porter, the founder of the Satoshi Action Fund, praised New Hampshire's move, stating that the state had not just passed a bill but sparked a movement. He emphasized that the law allows for the protection of taxpayer money, diversification of reserves, and future-proofing of state treasuries by embracing the most secure monetary network on Earth. Although New Hampshire is the first US state to approve a crypto reserve law, there is a growing trend of other states making legislative efforts to set up a Bitcoin reserve. Notably, Arizona had been the first state to pass a similar bill to its governor’s desk, but the state’s governor recently vetoed the legislation. On May 5, Florida “indefinitely postponed” two crypto-related bills that would have helped create a Bitcoin reserve for the state, joining a number of other states whose attempts to back their treasury with Bitcoin have misfired, despite intensified national attention on the policy since President Donald Trump’s pledge.