Arizona Senate moves forward with Bitcoin reserve legislation

Arizona lawmakers have advanced a Bitcoin strategic reserve bill, which seeks to deploy the world’s first cryptocurrency as a savings technology for the state.

The Strategic Bitcoin Reserve Act (SB1025), which is co-sponsored by Senator Wendy Rogers and Representative Jeff Weninger, was passed by the Arizona State Senate Finance Committee with a five to two vote on Jan. 27.

The bill will now move to the Senate Rules Committee for final debate and amendments. Approval by the Senate would advance the bill to the House of Representatives.

The bill proposes the creation of a strategic Bitcoin reserve by the US Treasury for “the storage of government Bitcoin holdings,” which would also allow other public funds to store their digital assets in a “secure, segregated account within the strategic Bitcoin reserve.”

The bill would allow up to 10% of a government entity’s or public fund’s capital to be invested in Bitcoin (BTC) and other digital assets. It also opens the door for pension funds to allocate resources to Bitcoin, potentially increasing public interest in cryptocurrencies.

Up to 20% of Gen Z and Alpha are already open to receiving pensions in cryptocurrency, while 78% expressed greater trust in “alternative retirement savings options” over traditional pension funds, Cointelegraph reported on Jan. 16.

Arizona’s decision to include Bitcoin in its financial strategy could lead to a domino effect among other states, according to Anndy Lian, author and intergovernmental blockchain expert.

He told Cointelegraph:

“Imagine if your state decided to put some of your tax dollars into Bitcoin; it might encourage places like Texas or Pennsylvania, where they’ve already been talking about similar ideas, to jump on the bandwagon quicker.”

However, Lian cautioned that a Bitcoin reserve would require safeguards due to cryptocurrency’s volatility, noting that taxpayers could face financial risks similar to those encountered by crypto investors.

Related: Trump’s executive order a ’game-changer’ for institutional crypto adoption

Bitcoin price to $1 million on federal Bitcoin Reserve Act?

As one of the most anticipated crypto-related bills in history, the Bitcoin Act — championed by Wyoming Republican Senator Cynthia Lummis — has generated significant excitement among investors.

The nationwide approval of a US Bitcoin reserve could push Bitcoin above the seven-figure mark as soon as this cycle, according to Adam Back, co-founder and CEO of Blockstream, the inventor of Hashcash and one of the most notable cryptographers in the industry.

The potential approval could lead to a rapid price appreciation, as market participants have yet to price in this likelihood, wrote Back in a Nov. 18 X post.

There are at least 13 other Bitcoin reserve-related bills at various stages in states such as Massachusetts, Pennsylvania, Kansas, New Hampshire, Wyoming, Ohio, Utah and North Dakota, according to Bitcoinlaws.io.

Related: MiCA can attract more crypto investment despite overregulation concerns

Bitcoin reserve proposals are gaining support across the US thanks to President Donald Trump’s pro-crypto policies and recent executive order on crypto.

The success of the bill could bring an influx of new institutional Bitcoin adopters, according to Anastasija Plotnikova, co-founder and CEO of Fideum.

The regulatory expert told Cointelegraph:

“Analysts suggest it could drive Bitcoin’s price toward $500,000 while attracting institutional investors like pension and sovereign wealth funds, further legitimizing Bitcoin as an asset class.”

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