Arizona became the first state to pass a law that would create a strategic Bitcoin sanctuary after approving measures for voting that were destroyed mainly along the party line on April 28th.
The law, sponsored by Republican Sen. Wendy Rogers, allows the state Treasury Department to invest a portion of its public funds in Bitcoin (BTC).
According to details shared by Dennis Porter, CEO of Satoshi Action Fund, no members were exempt or absent during either vote. The bill passed the House of Representatives 29-25 and the Senate 31-25, with four lawmakers not voting in the Senate.
The bill is currently heading to Gov. Katie Hobbs for consideration. Hobbs has yet to indicate whether she will sign or refuse the action.
However, she recently pledged to reject all bills sent to her desk until the state legislature passes a new budget. Hobbs has not commented specifically on SB1025, but continues to stick to her broader veto, casting uncertainty in the prospects of the bill.
Supporters of the proposal argue that establishing a Bitcoin reserve will help Arizona position the nation at the forefront of assets diversification, hedging against inflation and digital financial innovation.
They point to the fixed supply and diversified nature of Bitcoin, particularly amid concerns over traditional Fiat reserves, in concerns about the country’s debt and currency devaluation.
Meanwhile, critics warn that Bitcoin’s extreme price volatility could expose state funds to significant financial risks. Some also raised concern about the lack of federal regulations surrounding crypto, questioning whether public money should be used to invest in speculative assets.
In the language of the bill, Bitcoin investments are classified as digital currency holdings in the state’s investment portfolio, subject to monitoring and restrictions defined by Arizona’s existing public fund management regulations.
The Arizona initiative is in a broader national conversation about the role of digital assets in finance. While several state legislatures have been discussing cryptocurrency measures in recent years, Arizona is the first to expressly approve the Bitcoin Reserve.
Gov. Hobbs will make the final decision and decide whether Arizona will become the first US state to formally integrate Bitcoin into its fiscal strategy.
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