Arizona Senate Passes Bitcoin Reserve Bill

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On February 27, the Arizona Senate took an important step in state financial innovation by passing two bills on crypto reserve funds, opening the possibility for the state government to manage digital asset funds.

Lawmakers believe that establishing a dedicated crypto reserve fund will prepare Arizona to approach the upcoming federal legal framework, while helping the state leverage advanced financial technologies to protect public funds in the context of a volatile economy.

The legislature passed the Strategic Digital Asset Reserve Fund (SB 1373) bill on its third reading with a 17-12 vote. This bill, sponsored by Republican Senator Mark Finchem, will establish a Strategic Digital Asset Reserve Fund managed by the state treasury.

The fund will combine budgetary allocations from the state with digital assets seized by law enforcement, and limit investments to no more than 10% of total deposits in each fiscal year. The proposal also allows the treasury to lend out digital assets to generate returns, provided these actions do not increase financial risk.

Concurrently, the second bill - the Strategic BTC Reserve Act (SB 1025) - received a 17-11 vote. This bill, co-sponsored by Republican Senator Wendy Rogers and Representative Jeff Weninger, aims to empower public funds to invest directly in cryptocurrencies.

Both bills have now been transferred to the state House for further deliberation.

The legislative movement in Arizona is part of a larger trend as U.S. states seek to integrate digital assets into public finance. Several states are currently considering crypto reserve fund proposals, with Utah and Texas making notable progress.

In Utah, lawmakers have successfully passed key votes and committee reviews for a crypto reserve fund bill, bringing it closer to final voting and formal approval. Meanwhile, Texas is also making strong strides - with the recent Senate Bill 21 passing the Senate Banking Committee vote - to create a Strategic BTC Reserve Fund.

In contrast, similar initiatives in Montana, Wyoming, North Dakota, South Dakota, and Pennsylvania have been rejected, reflecting the divergent approaches across the states.

Proponents argue that state-managed digital reserve funds are a proactive strategy to modernize public finance and enhance resilience in the face of economic volatility. However, critics warn of the inherent risks of the crypto market, calling for a cautious and calculated approach.

As debates continue at both the state and national levels, the outcomes in Utah, Arizona, Texas, and other key states may set precedents on how to manage digital assets in public finance and potentially influence future federal legislation.

Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.

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Dinh Dinh

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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