Arizona Senate Advances Invoice to Create Digital Property Reserve Fund – Decrypt

In short
Arizona’s Senate Finance Committee handed SB 1649 in a 4–2–1 vote on February 16, sending it to the Senate Guidelines Committee, which cleared it on February 23.
The invoice would authorize the state treasurer to carry, make investments, and mortgage seized digital property by a professional custodian or accepted exchange-traded product.
The measure is Arizona's newest try to determine a crypto reserve, following Governor Katie Hobbs' veto of a virtually an identical invoice in 2025.
Arizona lawmakers are transferring to determine a state-managed digital property reserve fund, advancing laws that may permit the state treasurer to carry, make investments, and mortgage seized crypto, as Bitcoin slid nearly 5% on the day of its committee clearance.Final week, the Arizona Senate Finance Committee voted 4–2–1 to advance Senate Invoice 1649, launched by Senator Mark Finchem, which might create a “Digital Property Strategic Reserve Fund” constructed from cryptocurrency seized, confiscated, or surrendered to the state.The measure then cleared the Senate Guidelines Committee on Tuesday, the identical day it was positioned on the consent calendar with no objection, and obtained backing from the Senate Republican Caucus. The invoice now heads to a full Senate ground vote.The measure highlights Arizona's continued push towards crypto adoption regardless of Governor Katie Hobbs' sustained opposition, and its passage hinges on whether or not Finchem's seizure-funded framing can survive the identical govt scrutiny that killed a near-identical proposal final yr.Underneath SB 1649, the state treasurer would administer the fund, with authority to speculate its whole holdings in any fiscal yr and to mortgage digital property to generate extra returns, supplied the association “doesn't enhance any monetary dangers to this state.”Property could be held both by a professional custodian, outlined as a federal or state-chartered financial institution, belief firm, or particular goal depository establishment, or by an exchange-traded product accepted by the SEC, the Commodities Futures Buying and selling Fee, or Arizona's Division of Insurance coverage and Monetary Establishments, based on the invoice.Fairly than limiting the reserve to Bitcoin, SB 1649 defines qualifying “digital property” as any crypto assembly a “cryptocurrency honest worth rating” of at the very least 1% of what the invoice calls the “digital gold commonplace benchmark,” a threshold established, per the laws's personal findings, when Bitcoin’s market worth reached $100,000 per coin.Particularly named eligible property embody Bitcoin, Digibyte, XRP, stablecoins, and non-fungible tokens.The invoice advances right into a weakening market, with the broader crypto sector down 3.8% and Bitcoin sliding under $64,000 after shedding practically 5% in 24 hours and 28% over the previous month, per CoinGecko knowledge.Arizona and cryptoArizona has been among the many most lively state legislatures on crypto coverage, however a lot of that exercise has stalled on the Governor's workplace.Through the 2025 legislative session, Hobbs rejected Senate Invoice 1373, the closest predecessor to Finchem's present proposal, which might have equally constructed a reserve from seized crypto, citing that “present volatility in cryptocurrency markets doesn't make a prudent match for common fund {dollars}.”She additionally blocked Senate Invoice 1025, the “Arizona Strategic Bitcoin Reserve Act,” which might have allowed state treasurers and retirement techniques to allocate as much as 10% of state funds into Bitcoin and different digital property.Senate Invoice 1024, which might have allowed Arizona companies to just accept crypto for tax funds and costs, was additionally vetoed, with Hobbs saying it “nonetheless leaves the door open for an excessive amount of danger.”Moreover, the Governor rejected Home Invoice 2324, a Bitcoin reserve fund seeded by criminally forfeited property, saying it “disincentivizes native regulation enforcement from working with the state on digital asset forfeiture by eradicating seized property from native jurisdictions.”SB 1649 should go the total Senate earlier than advancing to the Home, and, in the end, the Governor's desk.Day by day Debrief NewsletterStart on daily basis with the highest information tales proper now, plus authentic options, a podcast, movies and extra.