Arizona Passes Bitcoin Reserve Bill Awaiting Governor's Signature

The interstate Bitcoin (BTC) reserve race in the USA has seen significant developments, with the latest good news coming from Arizona. The Arizona Assembly has passed the Bitcoin reserve bill HB2324, which, if signed by Governor Katie Hobbs, will create a reserve fund for assets seized through criminal forfeiture to be included in the reserves. This bill is now awaiting the governor's final signature and, if enacted, will be the state's second reserve bill.

Governor Katie Hobbs has a history of both approving and vetoing Bitcoin-related bills. Previously, she vetoed two Bitcoin Reserve bills that would have allowed state investment (SB1373 and SB1025). However, she signed the reserve bill HB 2749, which paved the way for the creation of a reserve fund for unclaimed assets. HB 2324 outlines how funds from sales of seized cryptocurrencies will be allocated. The first $300,000 raised will go to the Anti-Racketeering Revolving Fund. Any amount above that will continue to support the same fund at 50%, with 25% going to the state’s General Fund and the remaining 25% allocated to the newly created Bitcoin and Digital Assets Reserve Fund.

Arizona is also considering several other bills related to cryptocurrency security, kiosks, and payments, indicating a broader interest in integrating digital assets into the state's financial framework. This move by Arizona follows a trend set by Texas, which became the first state in U.S. history to officially allocate public funds for acquiring and holding Bitcoin. Governor Greg Abbott signed Senate Bill 21 (SB21), establishing the Texas Strategic Bitcoin Reserve. This reserve is designed to hold Bitcoin as a long-term investment and as a hedge against future inflation.

The Texas Strategic Bitcoin Reserve is an independent fund managed by the Texas Comptroller of Public Accounts, advised by a crypto advisory committee composed of three investment experts. The reserve's focus is on Bitcoin, the only digital asset with a market capitalization exceeding $500 billion. The reserve can grow through various means, including surplus funds, forks, airdrops, investment income, and public donations of cryptocurrency. Transparency and accountability are ensured through a biennial public report on the reserve's holdings and performance. Additionally, House Bill 4488 protects the reserve from being swept into the state's general revenue fund, safeguarding it from budgetary fluctuations.

Texas's bold initiative is already inspiring other states. Kentucky, North Carolina, Oklahoma, and several others have introduced similar Bitcoin reserve bills. This trend suggests a potential "global race" to stock up on Bitcoin as state governments and even universities explore diversifying their portfolios with digital assets. Arizona and New Hampshire have passed similar legislation, but their reserves are backed only by non-tax revenues such as forfeited cryptocurrency assets or donations, unlike Texas's use of real public funds.

The management of the Texas Bitcoin Reserve is overseen by the Texas Comptroller, who has broad authority to purchase, retain, and liquidate Bitcoin reserves as needed. Security is a top priority, with the law mandating intensive cold storage procedures and allowing the state to engage skilled custodians and liquidity providers with at least five years of experience in digital asset trading. The advisory committee will assist in investment strategies, risk management, and staying informed about evolving regulations. Transparency is maintained through a biennial public report that discloses the amount and value of Bitcoin held, investment performance, and any updates on the reserve's status. This disclosure aims to address volatility and risk concerns, positioning Texas as a leader in responsible crypto finance.

Texas's move to adopt Bitcoin as a strategic reserve asset sends a powerful message to institutional investors, pension funds, and other government agencies. If more states follow Texas's example, demand for spot Bitcoin ETFs and direct ownership of BTC could surge, potentially driving prices higher. This development further cements Bitcoin's status as "digital gold" for both public and private investment portfolios. As Texas's reserve goes live later this fall, all eyes are on the experiment unfolding. Will the reserve outperform traditional assets and initiate a domino effect of copycat measures, or will volatility and political opposition temper the trend? Texas has made its bet as the first state to buy Bitcoin with public funds, a development that may reshape the future of American government finance.