Arizona is about to make history by being the first state in the US to approve the proposed bitcoin reserve bill. On January 27, 2025 the Senate Finance Committee passed Senate Bill 1025 (SB1025) also known as the “Arizona Strategic Bitcoin Reserve Act 5-2”.
This historic bill allows up to 10% of public funds including state treasuries and retirement systems to be invested in bitcoin. If passed, Arizona will be the first state to do so.
SB1025 lays out a clear framework for state investments in bitcoin. It allows Arizona’s public funds to be invested in bitcoin with specific guidelines for safe storage.
Co-sponsored by state senators Wendy Rogers and Jeff Weninger, the bill also allows for bitcoin holdings to be stored in a federal Strategic Bitcoin Reserve if the US Treasury establishes one.
“A public fund may invest not more than ten percent of the public monies under its control in virtual currency holdings,” the bill reads. This is a conservative cap to balance the benefits with the risks of investing in bitcoin.
The bill also includes measures for safe storage including cold and multi-signature wallets and strict oversight protocols. These are to minimize the risks of bitcoin’s volatility and protect public funds.
The Finance Committee’s approval is a big step but the bill still has a long way to go. It now goes to the Senate Rules Committee where the rules for debate and amendments will be decided.
Then it will go to the full Senate for a vote. If passed it will then go to the Arizona House of Representatives for further consideration.
If Arizona passes the bill, it will be the first state in the US to invest public funds in bitcoin. Supporters of the bill think this will modernize state finances and provide a hedge against economic instability.
Dennis Porter, CEO of the Satoshi Action Fund, said, “Arizona has become the first state in the nation to pass out of committee a bill to create a ‘Strategic Bitcoin Reserve.” He says Arizona will be the first state to lead the way.
As of January 2025, 11 states including Texas, Wyoming and Pennsylvania have introduced similar bills. Some predict 16 states will by the end of the year.
Arizona is moving ahead of the crowd with state-level interest in bitcoin investments.
The bill is advancing as big things are happening at the federal level.
Scott Bessent was just confirmed as U.S. Treasury Secretary in a 68-29 Senate vote and is a Bitcoin supporter. Bessent has come out against central bank digital currencies (CBDCs) and has expressed interest in a federal bitcoin reserve.
President Trump is also pro-Bitcoin, signing an executive order to create a comprehensive framework for “digital assets.” Many Bitcoiners criticized the executive order, saying it doesn’t mention bitcoin specifically, and it could be a sign that the federal government is losing its focus.
Bitcoin advocates say the scarce digital asset has benefits like decentralization, limited supply and being a store of value. They argue that adding bitcoin to state investment portfolios would protect public funds from economic risks and inflation.
They also warn of the risks of “cryptocurrency” investments, saying other altcoins are not stores of value, lack a “established cap” and are generally centralized and controlled single entities.
