The Arizona Senate took a significant step toward modernizing state finance by advancing two crypto reserve bills that could lead to state-managed digital asset funds on Feb. 27.

Lawmakers have argued that creating a dedicated crypto reserve prepares Arizona for an inevitable federal regulatory framework and positions the state to harness emerging financial technologies to safeguard public funds amid a volatile economic landscape.

Arizona’s crypto bills

The legislature approved the Strategic Digital Assets Reserve bill (SB 1373) on its third reading by a 17–12 vote. Sponsored by Republican Sen. Mark Finchem, the measure would create a Digital Assets Strategic Reserve Fund managed by the state treasurer.

The fund would combine state-appropriated dollars with digital assets seized by law enforcement while limiting investments to no more than 10% of total deposits in any fiscal year. Under the proposal, the treasurer could also loan digital assets to generate returns, provided that such actions do not elevate financial risk.

Meanwhile, a second measure — the Strategic Bitcoin Reserve Act (SB 1025) — received a 17–11 vote. Co-sponsored by Republican Sen. Wendy Rogers and Rep. Jeff Weninger, the proposal aims to empower public funds to invest directly in cryptocurrencies.

Both bills now advance to the state House for further debate.

Legislative race

Arizona’s legislative push is part of a broader national trend as states explore ways to integrate digital assets into public finance. Several states have crypto reserve proposals pending in their states, with Utah and Texas among those making significant progress.

Lawmakers in Utah have successfully passed crucial votes and committee reviews for their crypto reserve bill, positioning it closer to a final vote and eventual approval. Meanwhile, Texas has also progressed — with Senate Bill 21 recently passing its senate banking committee vote — to create a strategic Bitcoin reserve.

In contrast, similar initiatives in Montana, Wyoming, North Dakota, South Dakota, and Pennsylvania have been rejected, reflecting a mixed approach across the nation.

Proponents argue that establishing state-managed digital reserves is a proactive strategy to modernize public finance and build resilience amid economic volatility. However, critics have cautioned that the inherent risks of the crypto market require a careful and measured approach.

As debates continue at both the state and national levels, the outcomes in Utah, Arizona, Texas, and other key states may set important precedents for how digital assets are managed in public finance, potentially influencing future federal legislation.

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