Arizona is moving closer to becoming the first state to use Bitcoin as part of its public funds. The Arizona House approved two bills, SB 1025 and SB 1373, on April 28, 2025. These bills allow up to 10% of the state’s public money, including its treasury and pension funds, to be invested in Bitcoin and other digital assets. SB 1373 creates a new Digital Assets Strategic Reserve Fund. This fund will manage the state’s digital investments. It can be funded with seized crypto assets and money set aside by the state. The governor, Katie Hobbs, needs to sign the bills into law. So far, there is no clear support from her side.
The plan could put as much as 10% of Arizona’s $315 billion in state assets into Bitcoin. The focus is mainly on Bitcoin as the main reserve asset, but other digital assets could be included. The legislation requires on-chain auditability, which means the investments must be transparent and easy to track using blockchain technology. The funds will come from various sources, such as general reserves, pension investments, and seized crypto assets. The goal is to protect the state from inflation and add diversity to its holdings. This approach aligns with a broader trend of U.S. states exploring cryptocurrencies as strategic reserves to enhance financial stability. The limited supply of 21 million Bitcoins is a key factor contributing to its market value.
There has been political debate about this move. Governor Hobbs previously threatened to veto the budget if the bills passed. However, a bipartisan deal on disability funding helped remove that veto threat. Some critics worry that Bitcoin’s high price swings could put public money at risk. The idea of a state holding Bitcoin is similar to efforts in Texas, Florida, and New Hampshire. Because this is a new approach, the final vote in the House needs wider support.
Market reactions have been positive. Bitcoin’s price climbed near $95,000 after the vote, up 25% from earlier in April. Many see this as a sign of growing acceptance of cryptocurrencies. If the bills become law, other states might follow Arizona’s lead. The legislation also aims to position Arizona as a hub for blockchain and crypto businesses. It could attract new investments and help the state fight inflation by holding Bitcoin. The governor’s decision is expected soon. If she signs the bills, Arizona will be the first to establish a Bitcoin reserve for public funds.
