Main Points：
- Arizona’s Legislature passes SB1025 and SB1373 to authorize state-held Bitcoin and digital-asset reserves.
- Bills would permit up to 10% of certain public funds (treasury and pension) to be invested in Bitcoin or major digital assets.
- Similar legislation is advancing in New Hampshire (HB302), clearing House and committee stages and headed to a full Senate vote.
- At the federal level, President Trump signed an executive order directing the U.S. Treasury to explore “strategic Bitcoin reserves” and “digital asset stockpiles.”
- Wyoming Senator Cynthia Lummis has introduced legislation to allow the federal government to hold seized crypto (over 1 million BTC) for strategic purposes.
Arizona’s Groundbreaking Bitcoin Reserve Bills
On April 28, 2025, the Arizona House of Representatives approved two landmark measures—Senate Bill 1025 (SB1025) and Senate Bill 1373 (SB1373)—to authorize the creation of state-level Bitcoin and digital-asset reserves. In a 31-25 vote, SB1025 passed its third reading, amending state law to permit the Arizona State Treasurer to allocate up to 10% of certain public funds (notably, state treasury and pension assets) into Bitcoin and other specified digital assets. On the same day, SB1373—establishing a Digital Assets Strategic Reserve Fund at the state level—was approved by a 37-19 margin.
What SB1025 and SB1373 Enshrine
- SB1025 empowers the State Treasurer to invest up to 10% of designated liquid reserves in “digital assets with a market capitalization threshold to be determined by regulation,” effectively targeting Bitcoin as the primary candidate given current market caps.
- SB1373 creates the legal framework for a Digital Assets Strategic Reserve Fund, separate from traditional holdings, laying out governance and reporting requirements to ensure transparency and risk management.
By passing both bills, Arizona becomes the first U.S. state to move beyond adoption of blockchain technologies or tax payments in crypto, and toward direct public-sector investment in digital assets.
Political Dynamics and Governor’s Considerations
In mid-April, Governor Katie Hobbs had signaled opposition to any new spending until a bipartisan funding plan for disability healthcare was enacted. On April 17, she threatened vetoes for bills lacking a funding solution for vulnerable Arizonans. However, after the Legislature passed companion funding bills on April 24, observers suggest she may now be open to signing SB1025 and SB1373—paving the way for their enactment into law.
New Hampshire’s Parallel Push
Arizona’s advance has inspired similar efforts elsewhere. In New Hampshire, House Bill 302 (HB302) cleared the House in a narrow 192–179 vote in early April and passed a Senate Commerce Committee report of “ought to pass” by 4–1. HB302 would allow the New Hampshire State Treasurer to invest up to 10% of the state’s general fund in “precious metals and digital assets with market capitalizations exceeding $500 billion,” effectively limiting to Bitcoin at present. The bill now awaits a full Senate vote, followed by the governor’s signature if approved.
Key Features of HB302
- 10% Cap on general‐fund investments.
- Asset Qualification: Only assets above $500 billion market cap qualify (currently only BTC).
- Custody Options: Direct holding by the Treasury, use of qualified custodians, or investment via regulated exchange-traded products.
Supporters argue the reserve can deliver outsized returns compared to low-yield government securities, while critics warn of Bitcoin’s price volatility and potential budgetary risks.
Federal Executive Action and Congressional Proposals
Beyond state initiatives, the federal government has begun exploring strategic crypto reserves:
- In March 2025, President Donald Trump signed an executive order directing the U.S. Treasury to study the establishment of a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile,” reflecting interest in diversifying national asset holdings ﹘ a move mirroring the state‐level approach.
- Senator Cynthia Lummis (R-WY) introduced legislation to authorize the federal government to hold and manage over 1 million BTC acquired through civil and criminal asset forfeiture. Her bill would codify the executive order’s intent into statute, aiming to create a new federal asset class and potential revenue stream for the U.S. Treasury.
These federal efforts indicate growing bipartisan interest in recognizing Bitcoin’s strategic value and potential to serve as an inflation hedge, even amid debates over regulatory frameworks and custodial safeguards.
Comparative State Landscape
While Arizona and New Hampshire have taken the lead, at least 15 other states are exploring similar reserve‐style legislation, ranging from Alabama to Virginia. Most proposals cap investments at 5–10% of certain funds and include governance protocols for risk management. Key variants include:
| State | Bill ID | Status | Cap (%) | Asset Scope |
|---|---|---|---|---|
| Arizona | SB1025 / SB1373 | Passed House | 10 | Digital assets (market cap TBD) |
| New Hampshire | HB302 | Passed House & Committee | 10 | Precious metals & assets >$500B |
| South Carolina | H. TBD | Introduced | 10 | Bitcoin only |
| Montana | HB XYZ | Drafting phase | 5 | Bitcoin & Ethereum |
Each state tailors thresholds and governance protocols, but the common thread is leveraging Bitcoin’s scarcity and digital‐native qualities as a complement to traditional reserve assets.
Risks, Criticisms, and Safeguards
Price Volatility
Critics highlight Bitcoin’s rapid price swings—often exceeding ±10% in a single day—as a threat to the stability of public finances. Proponents counter that long‐term trends show significant appreciation and that proper governance can mitigate drawdowns.
Custody and Security
Ensuring secure custody is paramount. Legislation typically mandates use of qualified custodians, multi-signature wallets, or regulated exchange-traded funds to protect public assets from hacks and operational failures.
Regulatory and Legal Hurdles
Differences in state securities laws and federal regulatory ambiguity (SEC vs. CFTC jurisdiction) could complicate implementation. Most bills include provisions requiring adherence to applicable securities regulations and regular reporting to legislative oversight bodies.
Practical Implications for Crypto Investors and Businesses
For crypto‐native businesses and investors, these legislative advances signal broader institutional acceptance of Bitcoin. Potential outcomes include:
- Improved Market Liquidity: State purchases by large public funds could inject substantial demand into the market.
- Enhanced Credibility: Formal adoption by government entities may bolster Bitcoin’s reputation as a legitimate asset class.
- Regulatory Clarity: As states codify Bitcoin reserves, they may also refine licensing requirements for custodians and brokers, leading to clearer operational standards.
Companies offering custody services, compliance tools, and on‐chain analytics may see increased demand as public-sector participants seek partners for governance, auditing, and security.
Conclusion
Arizona’s passage of SB1025 and SB1373 represents a historic first in U.S. state-level crypto policy: authorizing up to 10% of public funds to be invested directly in Bitcoin and other digital assets. Parallel efforts in New Hampshire (HB302) and federal executive and legislative actions underscore a growing recognition of Bitcoin as a strategic reserve asset. While volatility and regulatory complexity present challenges, proponents argue that well‐governed reserves can diversify asset portfolios, hedge against inflation, and catalyze further innovation in financial markets. As more states deliberate similar measures, and with federal initiatives on the horizon, the movement to institutionalize Bitcoin reserves marks a significant evolution in the maturation of the cryptocurrency ecosystem.
