Arizona’s Digital Asset Reserve Bill Moves Towards Final House Vote

Arizona’s Digital Asset Reserve Bill (SB 1373) nears a final vote after approval from the Committee of the Whole. This bill aims to establish a fund of seized digital assets, managed by the state treasurer. It caps investments in digital assets to 10% annually. However, Governor Katie Hobbs may veto the legislation due to unrelated funding issues. Arizona also pursues additional measures to curb Bitcoin ATM fraud.

Arizona’s Digital Asset Reserve Bill, designated as State Bill 1373, is moving towards a final vote in the House following its approval by the Committee of the Whole on April 17. This legislation aims to establish a fund consisting of digital assets confiscated in criminal cases, to be managed by the state treasurer, who can invest up to 10% of the fund’s value in digital assets each fiscal year.

The bill also allows the treasurer to loan out holdings from the fund, ensuring that such actions do not elevate the financial risk of the fund’s profile. Alongside Texas and New Hampshire, Arizona is advancing towards becoming a frontrunner in creating a state-backed digital asset reserve.

Previously, on March 25, SB 1373 and SB 1025, which exclusively concerns Bitcoin, cleared the House Rules Committee. While SB 1373 addresses various digital assets, SB 1025 permits investments of up to 10% of available funds into Bitcoin, as well as establishing a segregated federal reserve account for the cryptocurrency.

Both bills, however, may encounter opposition from Governor Katie Hobbs, who has indicated intentions to veto all legislation until a separate bill addressing a $122 million funding shortfall for disability services is enacted. Hobbs has rejected 15 bills this week, marking a high rejection rate and blocking over 20% of the legislation presented, primarily targeting Republican proposals.

Additionally, Arizona’s initiative to enhance cryptocurrency regulations includes House Bill 2387, which seeks to mitigate Bitcoin ATM fraud. This legislation proposes several protective measures, including daily transaction limits, mandatory licensing for operators, and requirements for refund policies to ensure user safety against fraud.