In brief
- Arizona’s Senate Finance Committee passed SB 1649 in a 4–2–1 vote on February 16, sending it to the Senate Rules Committee, which cleared it on February 23.
- The bill would authorize the state treasurer to hold, invest, and loan seized digital assets through a qualified custodian or approved exchange-traded product.
- The measure is Arizona’s latest attempt to establish a crypto reserve, following Governor Katie Hobbs’ veto of a nearly identical bill in 2025.
Arizona lawmakers are moving to establish a state-managed digital assets reserve fund, advancing legislation that would allow the state treasurer to hold, invest, and loan seized crypto, as Bitcoin slid almost 5% on the day of its committee clearance.
Last week, the Arizona Senate Finance Committee voted 4–2–1 to advance Senate Bill 1649, introduced by Senator Mark Finchem, which would create a “Digital Assets Strategic Reserve Fund” built from cryptocurrency seized, confiscated, or surrendered to the state.
The measure then cleared the Senate Rules Committee on Tuesday, the same day it was placed on the consent calendar with no objection, and received backing from the Senate Republican Caucus. The bill now heads to a full Senate floor vote.
The measure highlights Arizona’s continued push toward crypto adoption despite Governor Katie Hobbs’ sustained opposition, and its passage hinges on whether Finchem’s seizure-funded framing can survive the same executive scrutiny that killed a near-identical proposal last year.
Under SB 1649, the state treasurer would administer the fund, with authority to invest its total holdings in any fiscal year and to loan digital assets to generate additional returns, provided the arrangement “does not increase any financial risks to this state.”
Assets would be held either through a qualified custodian, defined as a federal or state-chartered bank, trust company, or special purpose depository institution, or through an exchange-traded product approved by the SEC, the Commodities Futures Trading Commission, or Arizona’s Department of Insurance and Financial Institutions, according to the bill.
Rather than limiting the reserve to Bitcoin, SB 1649 defines qualifying “digital assets” as any crypto meeting a “cryptocurrency fair value score” of at least 1% of what the bill calls the “digital gold standard benchmark,” a threshold established, per the legislation’s own findings, when Bitcoin’s market price reached $100,000 per coin.
Specifically named eligible assets include Bitcoin, Digibyte, XRP, stablecoins, and non-fungible tokens.
The bill advances into a weakening market, with the broader crypto sector down 3.8% and Bitcoin sliding below $64,000 after shedding nearly 5% in 24 hours and 28% over the past month, per CoinGecko data.
Arizona and crypto
Arizona has been among the most active state legislatures on crypto policy, but much of that activity has stalled at the Governor’s office.
During the 2025 legislative session, Hobbs rejected Senate Bill 1373, the closest predecessor to Finchem’s current proposal, which would have similarly built a reserve from seized crypto, citing that “current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.”
She also blocked Senate Bill 1025, the “Arizona Strategic Bitcoin Reserve Act,” which would have allowed state treasurers and retirement systems to allocate up to 10% of state funds into Bitcoin and other digital assets.
Senate Bill 1024, which would have allowed Arizona agencies to accept crypto for tax payments and fees, was also vetoed, with Hobbs saying it “still leaves the door open for too much risk.”
Additionally, the Governor rejected House Bill 2324, a Bitcoin reserve fund seeded by criminally forfeited assets, saying it “disincentivizes local law enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions.”
SB 1649 must pass the full Senate before advancing to the House, and, ultimately, the Governor’s desk.
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