Arizona Senate Revives Bitcoin Reserve Bill 16-14

The Arizona Senate has revived House Bill 2324, which aims to establish a state-run Bitcoin reserve, after it was initially rejected. The bill, which was brought back through a series of procedural motions, cleared the Senate in a narrow 16–14 vote. This development marks a significant step forward in the state's efforts to manage and store digital currencies seized in criminal investigations.

HB2324, introduced in February, seeks to create a "Bitcoin and Digital Assets Reserve Fund" to handle digital assets confiscated by the state. The bill updates Arizona's forfeiture laws to include digital assets and sets modern custody standards for cryptocurrencies, including blockchain-based access protocols and third-party custody options. If passed, the bill will establish a state-run Bitcoin Reserve Fund, streamline the management of seized cryptocurrencies, and align the legal framework with contemporary financial technology.

Under HB2324, the state will have three options for managing digital assets: storing them in state-authorized digital wallets, liquidating them through licensed cryptocurrency exchanges, or retaining them in their native form based on market conditions. The distribution model for the funds is also clearly outlined: the first $300,000 will go to the Attorney General’s Office, with the remaining funds split between the Attorney General’s Office, the general fund, and the Bitcoin Reserve Fund.

The bill now returns to the Arizona House, where it requires 31 votes to pass before heading to Governor Katie Hobbs for final approval. Governor Hobbs has previously vetoed two Bitcoin bills this year, citing concerns over market volatility and potential risks to the state's general fund. Despite these vetoes, the governor has signed a bill allowing cryptocurrency use under safer terms, indicating a cautious approach to integrating digital assets into public finance.

HB2324 is part of a broader global trend to formalize cryptocurrencies in public finance. Similar discussions are underway in other regions, reflecting a growing interest in leveraging digital assets for government reserves. The revival of HB2324 in Arizona represents a pivotal moment for U.S. states considering the integration of digital assets into their financial systems. However, the bill's fate remains uncertain until it reaches the governor's desk.