Co-sponsored by Wendy Rogers and Jeff Weninger, the bill grants the state the ability to invest up to 10% public funds, including those held by the state treasurer and public retirement systems, in Bitcoin and other digital assets. This move is seen as a bold attempt to capitalize on the growing popularity and potential of cryptocurrencies.

In addition to the direct investment in Bitcoin, the bill includes a provision that would allow the state’s digital assets to be stored in secure segregated accounts within a future federal strategic Bitcoin reserve, should such a reserve be established by the U.S. Treasury Secretary.

Arizona’s Push to Become a Pioneer

If SB1025 becomes law, Arizona would become the first U.S. state to officially permit public funds to be invested in Bitcoin. This could set a significant precedent for other states considering similar actions. The bill’s approval by the Arizona Senate Finance Committee comes after Wendy Rogers’ previous attempt in 2022 to make Bitcoin legal tender, which ultimately stalled.

Despite the promising vote, the bill still faces several hurdles before it can become law. After its passage through the Senate Finance Committee, the bill will move to the Senate Rules Committee, where it will undergo further review. If the committee approves it, the bill will be presented to the full Arizona State Senate for a vote, and if successful, it will then proceed to the House of Representatives for final approval.

The Role of Federal Support

One of the most interesting aspects of SB1025 is its mention of a potential federal strategic Bitcoin reserve. The bill includes language that allows Arizona’s digital assets to be stored in this reserve, should the U.S. Treasury Secretary establish such a fund. This idea gained momentum when Donald Trump floated the possibility of a national Bitcoin reserve during his presidency, sparking discussions about how Bitcoin could be incorporated into national economic policy.

The current U.S. Treasury Secretary, Scott Bessent, who has bipartisan support, is known for his opposition to a central bank digital currency (CBDC) and is considered pro-Bitcoin. His views align with the bill's objectives and could pave the way for broader acceptance of digital assets at the federal level.

Arizona’s Bitcoin bill is now one of eleven state bills focusing on Bitcoin reserves, with at least 15 states, and possibly 16, preparing similar legislation. Dennis Porter, CEO of the Satoshi Action Fund, states that Arizona is the first state to pass a Bitcoin reserve bill through a legislative committee, positioning it as a pioneer in integrating digital currencies into state finances.