Arizona Advances Bill to Establish Digital Assets Reserve Fund

The Arizona State Legislature has taken a significant step towards embracing digital assets by advancing Senate Bill 1649. This legislation proposes the creation of a Digital Assets Strategic Reserve Fund, which would enable the state to hold, invest, and potentially lend seized cryptocurrencies.

The fund would be administered by the State Treasurer and capitalized using confiscated or forfeited crypto assets rather than taxpayer funds. This approach aims to minimize the risk of exposing state funds to cryptocurrency volatility. Eligible assets for inclusion in the reserve include Bitcoin (BTC), XRP (XRP), DigiByte, stablecoins, and non-fungible tokens.

The inclusion of XRP in the eligibility framework marks a notable development for the token, as it would represent one of the first instances of a U.S. government entity formally recognizing it as a potential reserve asset. While the legislation does not require the state to immediately purchase or hold these assets, it establishes a legal structure for doing so in the future.