Arizona’s Bitcoin Reserve Bill Revived in Senate, Now Heads Back to House

Arizona’s House Bill 2324, which aims to create a Bitcoin and Digital Assets Reserve Fund, has been revived and successfully passed a Senate vote.

The legislation seeks to establish a state-managed digital asset reserve funded by confiscated criminal assets. It now moves on to the House of Representatives for further deliberation.

Arizona Reconsiders Bitcoin Reserve Bill

House Bill 2324 was first introduced in February, with Representative Jeff Weninger serving as the primary sponsor. The bill passed through both chambers. Yet, it failed a final vote in the House during its third reading on May 7.

However, a series of procedural motions to reconsider in both chambers revived the bill. It has now advanced, with the Senate voting 16-14 in favor of the measure.

HB 2324 seeks to expand Arizona’s forfeiture laws to include digital assets. It provides a legal framework for their seizure, storage, and sale.

A key provision in the bill is the creation of the Bitcoin and Digital Assets Reserve Fund. This will securely manage forfeited digital assets. 

The state treasurer will administer this fund. Moreover, the treasurer will be able to invest it in digital assets or exchange-traded funds (ETFs) related to digital assets. The bill also stipulates that the first $300,000 of proceeds will go to the Attorney General’s office. 

Any remaining value will be divided as follows: 50% to the Attorney General’s office, 25% to the State General Fund, and 25% to the Bitcoin and Digital Assets Reserve Fund. Moreover, the bill provides protections for innocent owners of property (including digital assets) by allowing them to claim their property if they were unaware of its connection to criminal activity.

“A digital asset may remain in its native form. A digital asset that is seized pursuant to this chapter must be stored in a state-approved, secure digital wallet system that is managed by authorized personnel to prevent loss, theft or unauthorized access,” the bill reads.

To clear the House, HB 2324 requires a majority vote from the 60 members, 33 of whom are Republicans. If it passes, the bill will be forwarded to Governor Katie Hobbs’ desk for her approval.

It’s important to note that the Governor has vetoed two digital asset reserve bills and one bill concerning cryptocurrency payments in the past. 

BeInCrypto reported that Governor Hobbs vetoed Senate Bill 1025 in May. This legislation would have allowed the state to create a Bitcoin reserve. She made a similar decision for SB 1024 and SB 1373.

SB 1024 sought to allow state agencies to accept cryptocurrency as payment for fines, taxes, and fees. On the other hand, SB 1373 proposed the creation of a Digital Assets Strategic Reserve Fund funded by appropriated funds and confiscated digital assets.

The Governor’s reasoning for rejecting SB 1373 was that she had already signed HB 2749. This house bill enables the state to claim ownership of abandoned digital assets if the owner does not respond to communications within three years.

Thus, even if HB 2324 clears the House, its chances of receiving the Governor’s approval appear slim. Anyway, only time will tell whether this revived bill will survive or end up down the same path as its predecessors.