Key Highlights
- Arizona lawmakers advanced a bill to create a state-level Digital Assets Strategic Reserve Fund as the Senate Finance Committee approved Senate Bill 1649 (SB1649) in a 4-2 vote
- This proposal will now go to the Rules Committee for further review
- Initially, the reserve would hold digital assets that are already in state possession from law enforcement seizures
On February 18, the Arizona Senate government is stepping up its game as its Senate committee has approved legislation to form a strategic reserve fund for digital assets. The Arizona Senate Finance Committee voted 4 to 2 on Monday to advance Senate Bill 1649 (SB1649).
This is a proposal that would create the nation’s first state-level Digital Assets Strategic Reserve Fund.
This bill is sponsored by Republican Senator Mark Finchem, and it will now move to the Senate Rules Committee for further review. If it passes the procedure, it will need approval from the full Senate, the House of Representatives, and the Governor’s signature before becoming law.
What is Arizona’s Digital Assets Reserve
Unlike some proposals that would require the state to purchase cryptocurrencies with taxpayer money, SB1649 has a very different approach. The proposed reserve fund will hold digital assets that are already in the state’s possession through law enforcement actions. This includes that these assets could be seized, confiscated, or voluntarily surrendered to Arizona authorities.
The Arizona State Treasurer would administer the fund and could also receive legislative appropriations to supplement it. Under the bill, the treasurer will gain authority to securely custody these assets using qualified custodians, advanced storage solutions, or regulated exchange-traded products.
Apart from this, the legislation might allow investment fund monies or even lending digital assets to generate returns, provided such actions do not increase the state’s overall financial risk.
This proposal has gained the attention of crypto enthusiasts as it involves various cryptocurrencies. The bill clearly names prominent cryptocurrencies such as Bitcoin (BTC) and XRP, as well as DigiByte, stablecoins, and even non-fungible tokens (NFTs).
This proposal comes with a “cryptocurrency fair value score” to identify the eligibility of individual cryptocurrencies, based on market capitalization, network activity, transaction volume, development ecosystem, decentralization, and security. This scoring system will help them to identify which digital assets can qualify for the reserve, apart from the names mentioned in the bill.
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