Arizona has enacted a law claiming custody of unclaimed digital assets after three years. This law, HB 2749, enables the state to hold crypto in its original form, unlike other jurisdictions. Governor Hobbs vetoed an additional bill allowing investment into Bitcoin, citing stability concerns of public funds. Other states, like New Hampshire, are taking varied regulatory paths in the crypto space.
In a significant move for digital asset regulation, Arizona has enacted a law that allows the state to claim ownership of unclaimed cryptocurrency and other digital assets after three years of abandonment. This development follows the veto by Governor Katie Hobbs of a separate bill that would have enabled the state to invest public funds in digital currencies like Bitcoin. Now, Arizona stands as the second state, following New Hampshire, to pass such a crypto-related law.
The new legislation, known as HB 2749, defines digital assets as abandoned if their owners fail to respond to communications for a three-year span. Once they are classified as abandoned, these assets must be forwarded to the Arizona Department of Revenue in their original form. This sets Arizona apart as the first state in the U.S. to take custody of digital assets without needing to convert them to cash, as highlighted by state officials. The bipartisan bill garnered support from both legislative chambers and was championed by House Commerce Committee Chairman Jeff Weninger.
Interestingly, the law allows state-qualified custodians to stake these assets or accept any airdropped assets, which could enhance their potential value. The proceeds generated will be deposited into a newly created Bitcoin and Digital Assets Reserve Fund, overseen by the State Treasurer and subjected to legislative appropriations. This framework aims to safeguard the value of unclaimed digital property while also enabling new financial avenues for state funding, all without increasing taxes or government scope.
However, not all crypto initiatives are moving forward in the state. Shortly before signing HB 2749, Governor Hobbs vetoed Senate Bill 1025, which proposed establishing a Bitcoin reserve where Arizona could allocate up to 10% of its treasury and pension assets into Bitcoin and comparable digital assets. In her veto message, Hobbs justified her decision by stating that the retirement system remains stable due to conventional investment strategies, asserting that digital assets do not currently uphold these required standards, indicating concern over their volatility.
This legislative contrast places Arizona at odds with other states that are also exploring cryptocurrency regulations. For instance, New Hampshire recently passed House Bill 302 that allows the state treasury to hold a limited amount of its reserves in cryptocurrencies. This could open the doors for Bitcoin or other suitable digital currencies that meet a market cap exceeding $500 billion, a category that currently only includes Bitcoin.
On the flip side, Florida has completely pulled back from related legislative initiatives concerning state-held digital assets, whereas North Carolina continues to work on a similar proposal. Clearly, states are taking varied approaches in how they handle digital currencies, reflecting a broader trend of differing regulatory strategies across the U.S.
