Legislative Progress

The Arizona legislature passed the (Strategic Bitcoin Reserve Act) and (Digital Asset Strategic Reserve Fund Act) in the third reading in the House on April 28, with a vote of 31 in favor and 25 against.

The two bills have now been submitted to Governor Katie Hobbs for review. She previously threatened to veto all bills due to state budget and healthcare issues for people with disabilities. Whether she can complete the signing or veto by May 6 will determine the final fate of these bills.

Core Breakthrough

  • Statutory Investment Authority

SB 1025 authorizes 'public funds'—including the treasury and state retirement systems—to invest no more than 10% of controllable funds in virtual currencies, primarily Bitcoin, but also covering other digital assets.

  • Strategic Reserve Framework

SB 1373 establishes the 'Digital Asset Strategic Reserve Fund,' integrating government-seized crypto assets with subsequent allocations, held through qualified custodians or isolated accounts under the Federal Reserve, and emphasizing on-chain auditing and risk control standards.

  • Federal Coordination Reserved

The bill stipulates that once the U.S. Department of the Treasury establishes a 'Strategic Bitcoin Reserve' account, the state government can deposit its held Bitcoin into the federal account, achieving seamless integration with future federal layouts.

Market Reaction

After the announcement, the price of Bitcoin briefly surged to about $95,000, a rise of approximately 25% from the low in early April, reflecting a rapid release of institutional and market expectations for 'institutional demand.' The trading volume on mainstream cryptocurrency exchanges significantly increased, with industry insiders believing this move will attract more asset managers to focus on state-level public offerings and pension holdings.

Significance and Impact

  • Historic Recognition: This is the first case in the U.S. to officially recognize Bitcoin's 'store of value' attribute at the local regulatory level, marking a transition of crypto assets from 'regulated subjects' to 'strategic reserve tools.'

  • Systemic Dividend: The bill signals a shift from passive regulation to active integration, which may encourage more states and even sovereign nations to establish digital asset reserves, further solidifying Bitcoin's status as 'digital gold.'

  • Competition and Demonstration: Arizona's practice may initiate an inter-state and even international competition for Bitcoin reserves, providing a legislative model for global governments to formulate digital asset policies.

Overall, if both bills eventually receive the governor's signature, Arizona will become the first U.S. state to truly incorporate crypto assets into its fiscal reserves, potentially opening a new chapter in the deep integration of digital assets and traditional finance.