Arizona lawmakers took an important step toward formalizing state-level engagement with digital assets by advancing legislation that would create a strategic reserve fund for digital assets, allowing the state to hold, invest and potentially lend seized cryptocurrencies.
Arizona Senate supports crypto reserve fund
The measure, Senate Bill 1649 (SB1649), was approved by the Senate Finance Committee in a 4-2 vote and was later approved by the Senate Rules Committee, bringing it closer to a full Senate vote.
Under the proposed law, the Arizona State Treasurer would administer the reserve, using assets that have been forfeited, forfeited, or returned through criminal or civil enforcement actions. Instead of relying on taxpayer money to acquire cryptocurrencies on the open market, the fund would be capitalized with these seized assets.
Eligible assets mentioned in the bill include Bitcoin (BTC), XRP (XRP), and DigiByte, as well as other digital assets that meet specified “fair value” criteria such as stablecoins and non-fungible tokens.
The inclusion of XRP in the reserve eligibility framework marks a notable development for the token, as it would represent one of the first instances where a US government entity would officially recognize it as a potential reserve asset.
Although the legislation does not require the state to purchase or hold these assets immediately, it establishes a legal structure for doing so in the future.
The bill’s progress highlights a broader trend in U.S. crypto policy, with several states exploring ways to integrate digital assets into public finance strategies.
However, similar initiatives in Arizona have been rebuffed in the past by Governor Katie Hobbs, who has expressed caution about exposing public funds to the volatility of cryptocurrencies. SB1649 must still pass both houses of the Legislature and survive executive review before becoming law.