Arizona Senate Revives Bill to Create Bitcoin Reserve Fund

Arizona is once again at the forefront of U.S. crypto legislation as its Senate voted to revive House Bill 2324, an ambitious proposal that aims to establish a Bitcoin and Digital Assets Reserve Fund. The bill, which failed in a House vote last month, has returned to the legislative spotlight after a narrow 16-14 Senate vote brought it back to life. HB2324 seeks to modernize Arizona’s handling of seized digital assets by creating a fund managed by the state treasury. This “Bitcoin and Digital Assets Reserve Fund” would receive, hold, and potentially dispose of cryptocurrencies confiscated through criminal forfeiture.

The bill outlines three central approaches for managing these resources: retaining them in state-approved wallets, selling them on registered crypto exchanges, or storing them under custody requirements such as blockchain-based access and third-party management. If enacted, the legislation would direct the first $300,000 of any digital asset liquidation to the Arizona Attorney General’s Office. Any additional funds would be divided: 50% to the Attorney General, 25% to the state’s general fund, and 25% to the Bitcoin and Digital Assets Reserve Fund. This structure aims to bolster law enforcement, shore up public finances, and hold crypto long-term without using taxpayer money.

HB2324 has become a focal point of Arizona’s political dispute over crypto regulation. The vote was almost entirely along party lines, with one Republican senator, Jake Hoffman, dissenting. The bill’s sponsor, Republican Jeff Weninger, positions it as a practical move given the rising number of criminal cases tied to crypto assets and a step forward in financial independence and modernization. Opponents argue that the state’s move to retain assets prone to wild swings in value could pose undue financial risk, particularly without clear direction from the federal government.

Despite the Senate’s vote to revive HB2324, the bill still faces a steep climb in the House and even steeper odds at the Governor’s desk. Arizona Governor Katie Hobbs has consistently vetoed similar crypto-related bills, citing concerns over market volatility and fiduciary responsibility. In May 2024, Hobbs vetoed SB 1025, which called for up to 10% of state pension and treasurer funds to be invested in Bitcoin, and SB 1373, which would have established a broader “Digital Assets Strategic Reserve Fund” with seized assets or legislative appropriations. In both vetoes, Hobbs pointed out that “untested and volatile” assets, like cryptocurrency, were too risky for public funds and retirement systems. However, Hobbs has signed more modest crypto bills, including HB 2749, which allows the state to retain unclaimed crypto without liquidating it, and HB 2387, which imposes consumer protection rules on crypto ATMs in Arizona.

The pattern of HB2324 in Arizona is consistent with a growing international trend. Nations including Ukraine, El Salvador, and Pakistan have made moves to integrate digital assets into the national cohort of reserves or public infrastructure. Supporters of Arizona’s bill argue that having the option to retain digital assets—instead of converting them into fiat—allows for long-term value appreciation and hedging against inflation. Critics, however, maintain that state governments should not act as speculative investors, particularly without a federal regulatory framework.

For HB2324 to move forward, it must receive at least 31 votes in the 60-member Arizona House. If passed, it will be sent to Governor Hobbs for final approval. Given the Governor’s past crypto vetoes and her cautious stance, the bill’s future remains highly uncertain. Still, its revival indicates growing political will in Arizona to define a crypto policy path—one that could influence other U.S. states watching closely. If HB2324 passes and is signed into law, Arizona would become one of the first U.S. states to create a formal digital asset reserve fund using seized cryptocurrencies—potentially creating a new legal and financial precedent in American crypto governance.