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On April 28, 2025, the Arizona State Legislature passed a historic (Strategic Bitcoin Reserve Bill) (SB1025), authorizing the state treasury to invest up to 10% of public funds (including pensions and emergency reserves) in Bitcoin. This bill not only marks the first time a local government in the United States has incorporated cryptocurrency into its fiscal strategy but also reveals the deep transformative potential of blockchain technology in the field of public governance. With the bill submitted to Governor Katie Hobbs awaiting final approval, the global market is closely watching the chain reaction this policy may trigger.
1. Core of the Bill: Legislative Logic from Controversy to Breakthrough
1. Policy Framework and Fund Scale
The bill allows the state government to include Bitcoin as a category of "digital currency holdings" in its investment portfolio, with a funding cap of 10% of public assets. Based on the Arizona Public Safety Personnel Retirement System (PSPRS) with a scale of $20 billion, the potential Bitcoin allocation could reach $2 billion (approximately 20,000 coins), equivalent to directly injecting incremental demand into the market. Although the amount is limited, its symbolic significance far exceeds the actual scale—this is the first legal acknowledgment of Bitcoin's reserve asset attribute by a sovereign entity.
2. Legislative Background and Political Games
The bill was proposed by Republican Senator Wendy Rogers, and core supporters believe that Bitcoin's fixed supply (21 million coins) and decentralized characteristics can hedge against fiat currency inflation risks. However, opponents worry that its price volatility (with a single-day fluctuation exceeding 8% on April 29, 2025) may threaten state financial security. Governor Hobbs' stance of "postponing approval" (requiring the passage of a new budget first) adds uncertainty to the bill's prospects.
3. Policy Competition Across the United States
Arizona is not an isolated case: the Texas Senate has passed a similar bill (SB-21), the Oklahoma House passed HB 1203 with a vote of 77:15, and 15 other states including Missouri and Kentucky are in the legislative research stage. If Arizona ultimately passes the bill, it will create a demonstration effect of "state-level reserves," accelerating the implementation of the federal-level Trump administration's "Bitcoin Strategic Reserve" plan.
2. Blockchain Technology: A Leap from Financial Tool to Governance Infrastructure
Arizona's legislative attempt is essentially a systematic verification of the public value of blockchain technology. In fact, the application of blockchain in government governance has transcended the realm of cryptocurrency, showing a trend of multidimensional penetration:
1. The Trust Foundation of Data Element Circulation
The "Blockchain-based Data Element Circulation Platform" in Nanjing achieves data rights confirmation and secure sharing through node interconnection, addressing trust barriers in cross-departmental collaboration. Similarly, the bidding anti-peeping system in Suzhou High-Speed Railway New City, which combines blockchain and multi-party secure computing, ensures transparency in bidding through encryption technology. Such cases confirm the irreplaceability of blockchain in enhancing government efficiency.
2. Carbon Governance and Green Finance Innovation
The "Blockchain-based Green Supply Chain Carbon Footprint Management Platform" in Suzhou High-Speed Railway New City and the carbon emission monitoring system "Mountain City Chain" in Chongqing utilize the immutable characteristics of blockchain to track carbon data, providing a credible foundation for carbon trading and green finance. This "on-chain carbon ledger" model is reconstructing the ESG (Environmental, Social, Governance) investment assessment system.
3. On-chain Reconstruction of Justice and Public Services
The "National Judicial Appraisal Blockchain Encoding Platform" by Nanjing Qingtian Technology realizes the full-process evidence preservation of cases, while Suzhou's "Blockchain + Court Electronic Delivery" system solidifies legal document delivery records through timestamps. Such applications improve judicial efficiency by over 30% while reducing the risk of evidence tampering.
3. Potential Impacts and Challenges of the Bitcoin Reserve Bill
1. Market Shockwaves: From Institutional Funds to Retail Behavior
If the bill takes effect, Arizona may become the world's first sovereign fund entity to hold Bitcoin. Although the $2 billion size only accounts for 0.1% of Bitcoin's circulation, its signaling effect may trigger a chain reaction:
◦ Institutional FOMO: Asset management giants like BlackRock and Fidelity may accelerate their layout of Bitcoin ETFs, attracting more pension funds to enter the market;
◦ Price Support: On-chain data shows that the $92,000-$97,000 range is a key chip zone, where institutional buying may form long-term support;
◦ Increased Volatility: The liquidation of 110,000 people on a single day (loss of $275 million) on April 29, 2025, indicates that policy changes in a high-leverage market environment may trigger severe shocks.
2. Dual Challenges of Regulation and Technology
◦ Conflict between Federal and State Authority: The U.S. Securities and Exchange Commission (SEC) has not yet unified its regulatory framework for cryptocurrency, and state-level reserves may trigger legal disputes at the federal level;
◦ Technical Risks: Vulnerabilities in smart contracts, 51% attacks, and other risks still need to be addressed through upgrades such as Zero-Knowledge Proofs (ZKP) and sharding technology;
◦ Geopolitical Games: The EU MiCA bill and China's "Digital Renminbi" strategy may counterbalance Bitcoin's global reserve status.
4. Future Outlook: The Governance Paradigm Revolution Driven by Blockchain
If the Arizona bill is successfully implemented, it could usher in a new era of "on-chain governance":
• Financial Transparency: The public ledger feature of Bitcoin allows for real-time tracking of fund flows, reducing the risk of corruption;
• Monetary Policy Innovation: Combining smart contracts to achieve automated fiscal stimulus disbursement or tax adjustment;
• Global Collaborative Network: Blockchain-based cross-border payment systems (such as Ripple) may reshape the international financial order.
However, this process requires the co-evolution of technology, policy, and society. As Standard Chartered Bank predicts the vision of "Bitcoin at $200,000 by 2025," its realization depends not only on market supply and demand but also on whether blockchain can find a balance between efficiency, security, and compliance.
Conclusion
The game surrounding the Arizona Bitcoin Reserve Bill is not only a clash between cryptocurrency and the traditional financial system but also an experimental ground for blockchain technology to reshape public governance. As code begins to write laws and on-chain data reconstructs trust, we may be witnessing humanity's transition to an era of "programmable governance." In this transformation, the race between technological innovation and institutional innovation may determine the global economic landscape of the next decade.
