Arizona’s Legislative Push for State-Run Cryptocurrency Reserves
Arizona is making notable strides in the realm of state-managed cryptocurrency reserves. This week marked significant progress, as a key legislative proposal cleared an important hurdle. The Strategic Digital Assets Reserve Bill (SB 1373) passed through the upper chamber of the House Committee of the Whole on April 17. This bill now awaits a final vote before potentially landing on Governor Katie Hobbs’ desk.
Establishing a Fund from Seized Digital Assets
The proposed SB 1373 seeks to establish a Digital Assets Strategic Reserve Fund by utilizing digital assets obtained through criminal proceedings. Managed by the state treasurer, this fund will have the capability to invest up to 10% of its total assets in digital currencies annually. Additionally, the treasurer is empowered to lend assets from the fund to bolster returns, provided these actions do not escalate financial risks.
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Potential Veto from Governor Hobbs
Even if the bill successfully passes its last House vote, there remains the possibility of a setback. Governor Hobbs has recently expressed her intent to veto all bills until the legislature enacts measures for disability funding. Her track record does not favor the crypto bill, having vetoed 15 bills in the past week alone. Julian Fahrer, CEO of Apollo and founder of Bitcoin Laws, is optimistic about SB 1373 passing the House, though he suggests it might be combined with another cryptocurrency bill, SB 1062, which aims to expand the definition of legal tender to include cryptocurrencies.
Progress of a Bitcoin-Specific Legislative Proposal
In parallel to SB 1373, Arizona lawmakers are advancing another cryptocurrency bill. The Arizona Strategic Bitcoin Reserve Act (SB 1025) focuses exclusively on Bitcoin investments, avoiding a broader spectrum of digital currencies. This legislation proposes allowing Arizona’s state retirement system and treasury to allocate up to 10% of available funds to Bitcoin investments. Having passed the House Committee of the Whole on April 1, SB 1025 now awaits a floor vote.
Leading the Charge in a Multi-State Race for Crypto Reserves
In the broader context of legislative developments, Arizona is emerging as a frontrunner among states pursuing cryptocurrency reserve bills. While Utah approved Bitcoin-related legislation on March 7, it removed a crucial provision regarding a Bitcoin reserve in its third reading. Meanwhile, the Texas Senate passed a comparable Bitcoin reserve bill on March 6, and New Hampshire’s House recently followed suit with similar legislation. Although Arizona appears to be spearheading these initiatives, Julian Fahrer believes the Texas bill has the highest likelihood of becoming law, owing to its relatively smooth legislative journey.
These state-level efforts underscore a growing trend of government entities recognizing cryptocurrencies as a vital component of their investment strategies, despite the political challenges that remain. If enacted, these bills would represent a transformative shift in how state governments approach the investment and management of digital assets.
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