Arizona Establishes Bitcoin Reserve Fund With HB 2749

Arizona has made a notable advancement in the realm of digital assets by passing House Bill 2749, which establishes a Bitcoin and Digital Assets Reserve Fund. This legislation, signed into law by Governor Katie Hobbs, permits the state to convert unclaimed property funds into Bitcoin and other top-tier digital assets. The new law modifies the state’s unclaimed-property code to include cryptocurrencies, creating a reserve funded entirely from abandoned digital holdings. Arizona is the second state in the U.S. to adopt such a framework, following New Hampshire, which enacted a similar measure just one day earlier.

The legislation, sponsored by Rep. Jeff Weninger, the Republican chair of the House Commerce Committee, passed both chambers with bipartisan support. Weninger emphasized the practicality of the law, stating that digital assets are already a present reality and that the legislation ensures Arizona does not miss out on the value of abandoned digital currency. The law mandates that unclaimed tokens be transferred to the state in their native form, rather than liquidated for cash, a first for any state in the U.S.

Under the new statute, a digital asset is considered abandoned if its owner fails to respond to three years of outreach. Once this threshold is met, the holder must remit the tokens directly to the Arizona Department of Revenue. Qualified custodians are authorized to stake proof-of-stake assets, collect airdrops, and harvest any other on-chain distributions generated by the unclaimed wallets. All revenue flows, along with any seized coins whose owners later emerge, are deposited into the Bitcoin and Digital Assets Reserve Fund. This fund is overseen by the State Treasurer and subject to ordinary legislative appropriation, ensuring that the measure is budget-neutral and does not draw from the state’s general fund or any other taxpayer-supported pool.

The nonprofit Satoshi Action Fund, which provided technical assistance during the legislative drafting, praised the enactment as a model for other jurisdictions. Dennis Porter, the group’s chief executive, highlighted that Arizona has shown the country how to turn forgotten assets into a fortress against inflation, converting dormant dollars into digital gold without touching the taxpayer’s pocket. This move is seen as a win for fiscal responsibility and for those who believe in sound money.

Governor Hobbs’ approval of HB 2749 comes just four days after she vetoed Senate Bill 1025, a broader proposal that would have allowed the state to deploy existing public funds and seized property into Bitcoin investments. The narrower scope of HB 2749, restricted to property that the state already holds in trust for missing owners, addressed the governor’s concerns about channeling public money into “untested assets.” Observers are now turning their attention to Senate Bill 1373, which awaits Hobbs’ signature and would authorize the Treasurer to allocate up to 10% of Arizona’s Budget Stabilization Fund to Bitcoin.

Arizona’s move to establish a Bitcoin reserve fund is part of a broader trend among U.S. states to recognize and incorporate digital assets into their financial strategies. The state’s proactive approach to managing unclaimed digital assets sets a precedent for other jurisdictions looking to leverage the value of abandoned cryptocurrencies. The legislation not only protects property rights and respects ownership but also provides the state with tools to account for a new category of value in the economy.