Arizona advances 10% Bitcoin investment bill for public funds

Arizona is on the verge of becoming the first US state to permit public funds to invest directly in Bitcoin (CRYPTO:BTC), as its Strategic Digital Assets Reserve Bill (SB 1025) moves closer to final approval.

The legislation, co-sponsored by State Senator Wendy Rogers and Representative Jeff Weninger, would allow the state treasurer and public retirement systems to allocate up to 10% of their portfolios into Bitcoin and other digital assets.

The bill passed the Arizona Senate Finance Committee in a 5-2 vote and has since cleared the House Committee of the Whole, leaving only a full House vote before it can be sent to Governor Katie Hobbs for her signature.

If enacted, Arizona would become the first state to officially invest public funds in Bitcoin, setting a precedent that could influence other states considering similar measures.

The proposal includes strict security provisions, such as the use of cold wallets, multi-signature authentication, and oversight mechanisms for safeguarding digital assets.

Additionally, should the US Treasury establish a federal Bitcoin reserve in the future, Arizona’s holdings could be stored in secure, segregated accounts within that reserve.

“Arizona has become the first state in the nation to pass out of committee a bill to create a ‘Strategic Bitcoin Reserve,’” remarked Dennis Porter, CEO of the Satoshi Action Fund, highlighting the state’s leadership in digital asset policy.

As at least 11 states, including Texas, Wyoming, and Pennsylvania, have introduced similar legislation, the bill's momentum is part of a larger trend that might see up to 16 states follow by the end of 2025.

Supporters argue that the move could help diversify state investments and potentially boost returns, while critics warn of the risks associated with cryptocurrency volatility.

“Arizona’s decision to include Bitcoin in its financial strategy could lead to a domino effect among other states,” noted Anndy Lian, an intergovernmental blockchain expert, but cautioned that “safeguards are essential due to cryptocurrency’s volatility.”

The bill’s future remains uncertain, as Governor Hobbs has recently vetoed several bipartisan bills and pledged to block new legislation until disability funding is addressed.

At the time of reporting, the Bitcoin (BTC) price was $84,730.51.