Arizona lawmakers are advancing legislation to create a state-managed digital assets reserve fund. Senate Bill 1649, which cleared a key Senate committee, would authorize the state treasurer to hold, invest, and loan seized cryptocurrency through qualified custodians or approved exchange-traded products. The bill represents Arizona’s latest push for crypto adoption, following Governor Katie Hobbs’ veto of a similar proposal in 2025, and now heads to a full Senate floor vote amid a declining market where Bitcoin recently slid below $64,000.
Arizona’s Senate Finance Committee passed SB 1649 in a 4–2–1 vote on February 16. The measure then cleared the Senate Rules Committee on February 23.
Introduced by Senator Mark Finchem, the bill would create a “Digital Assets Strategic Reserve Fund” built from seized, confiscated, or surrendered crypto. The state treasurer would administer the fund with authority to invest and loan digital assets.
Assets would be held through a qualified custodian or an approved exchange-traded product, according to the bill. The legislation defines eligible “digital assets” based on a cryptocurrency fair value score benchmarked against Bitcoin’s market price.
Specifically named eligible assets include Bitcoin, Digibyte, XRP, stablecoins, and non-fungible tokens. The bill advances as Bitcoin slid nearly 5% in 24 hours, trading below $64,000.
Arizona has been active on crypto policy, but activity has stalled at the Governor’s office. During the 2025 session, Governor Katie Hobbs rejected Senate Bill 1373, a near-identical predecessor to Finchem’s proposal.
Hobbs cited 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 to allocate funds into digital assets.
Senate Bill 1024, allowing agencies to accept crypto for tax payments, was also vetoed. Hobbs said it “still leaves the door open for too much risk.”
Additionally, the Governor rejected House Bill 2324, a Bitcoin reserve fund seeded by forfeited assets. She stated 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. Its passage hinges on whether Finchem’s seizure-funded framing can survive the same executive scrutiny that killed last year’s proposal.
