Arizona Takes First Step Toward State Bitcoin Investment with Committee Approval

TLDR:

• Arizona Senate Finance Committee approved bill SB1025 allowing up to 10% of state public funds to be invested in Bitcoin
• The bill includes provisions for storing digital assets within a potential federal Strategic Bitcoin Reserve under the Trump administration
• Scott Bessent, newly confirmed Treasury Secretary, is seen as pro-Bitcoin and opposed to central bank digital currency
• If passed, Arizona would become the first U.S. state to officially invest public funds in Bitcoin
• Eleven states have introduced similar Bitcoin reserve bills as of January 2025

Arizona has moved closer to becoming the first U.S. state to invest public funds in Bitcoin after its Senate Finance Committee approved a groundbreaking bill on January 27, 2025.

The legislation, known as SB1025 or the “Arizona Strategic Bitcoin Reserve Act,” passed with a 5-2 vote and now heads to the Senate Rules Committee.

The bill, co-sponsored by Senator Wendy Rogers and Representative Jeff Weninger, would permit the state to invest up to 10% of its public funds in Bitcoin and other virtual currencies. These funds include money managed by the state treasurer and retirement systems.

Under the proposed legislation, Arizona would store its digital asset holdings in a secure segregated account. The bill also includes provisions for transferring these holdings to a federal Strategic Bitcoin Reserve, should the U.S. Treasury establish one during President Donald Trump’s term.

The advancement of SB1025 comes at a time when multiple states are exploring similar legislation. According to Dennis Porter, CEO of the Satoshi Action Fund, eleven states have introduced their own Bitcoin reserve bills, with the potential for up to 16 states to follow suit.

Scott Bessent

This legislative push has gained additional momentum following the recent confirmation of Scott Bessent as Treasury Secretary. The Senate confirmed Bessent with bipartisan support in a 68-29 vote. As a supporter of Trump’s economic policies, Bessent has positioned himself as pro-Bitcoin while opposing the development of a central bank digital currency.

President Trump’s administration has shown increasing interest in cryptocurrency regulation and reserves. Last week, Trump signed an executive order aimed at establishing a comprehensive crypto regulatory framework in the United States and setting up a digital asset reserve. However, the order did not specifically mention Bitcoin, leaving questions about the administration’s plans for a Bitcoin-specific reserve.

The journey of SB1025 through Arizona’s legislative process marks a notable shift in state-level approaches to cryptocurrency investment. If the bill receives full approval, it would make Arizona the first state to officially invest public funds in Bitcoin, setting a precedent for other states considering similar measures.

This isn’t Arizona’s first attempt to integrate Bitcoin into its financial framework. Senator Rogers previously introduced legislation in 2022 proposing to make Bitcoin legal tender in the state, although that bill has not progressed substantially toward becoming law.

The current bill faces several more steps before potentially becoming law. After review by the Senate Rules Committee, which will establish parameters for floor debate and amendments, the legislation would need approval from the full Senate. If successful there, it would then move to the House of Representatives for consideration.

The 10% investment cap included in the bill represents a measured approach to incorporating cryptocurrency into state investments. This limitation helps manage potential risks while still allowing for meaningful investment in digital assets.

Porter highlighted the historic nature of the committee’s approval, noting that Arizona is the first state to have a Bitcoin reserve-specific bill advance through a legislative committee. This achievement could encourage other states considering similar legislation to move forward with their own proposals.

The bill’s provisions for integrating with a potential federal Strategic Bitcoin Reserve demonstrate awareness of possible future developments in national cryptocurrency policy. This forward-looking approach allows Arizona to align its state-level initiatives with potential federal frameworks.

Dennis Porter’s research indicates growing interest in Bitcoin reserve legislation across multiple states. His findings suggest that at least 15 states, with a possible sixteenth, are in various stages of introducing their own Bitcoin reserve bills.

The timing of Arizona’s legislative advancement coincides with broader changes in federal cryptocurrency policy. Trump’s recent executive order on cryptocurrency regulation suggests increasing federal attention to digital asset management, though the specific role of Bitcoin in these plans remains unclear.