Arizona’s legislature has advanced Senate Bill 1649, a proposal to create a Digital Assets Strategic Reserve Fund that would make the state one of the first in the U.S. to formally hold Bitcoin and other cryptocurrencies as reserve assets. The bill, sponsored by Republican Senator Mark Finchem, cleared two Senate committees and now awaits a full floor vote.
SB 1649 Clears Two Senate Committees in Back-to-Back Votes
The Arizona Senate Finance Committee approved SB 1649 in a 4-2-1 vote on February 16, 2026, sending the bill to the Senate Rules Committee. One week later, on February 23, the Rules Committee cleared the bill and placed it on the consent calendar with the backing of the Senate Republican Caucus.
The bill now requires a full Senate floor vote before moving to the Arizona House of Representatives. If it passes both chambers, it heads to Governor Katie Hobbs’ desk for final approval.
SB 1649 is Arizona’s third attempt at crypto reserve legislation. Governor Hobbs vetoed two prior bills in 2025: SB 1025, the “Arizona Strategic Bitcoin Reserve Act” that would have allowed up to 10% of public funds to be invested in Bitcoin, and SB 1373. Hobbs cited cryptocurrency’s “volatility” and called it an “untested investment” when rejecting those measures.
How the Digital Assets Strategic Reserve Fund Would Work
Unlike the vetoed 2025 bills, SB 1649 does not allocate taxpayer money to crypto purchases. The fund would be seeded exclusively from seized, confiscated, or surrendered cryptocurrency already in the state’s possession, requiring no direct state budget expenditure.
State-Level Bitcoin Reserve Movement
20+ States
across the US have introduced Bitcoin reserve legislation — Arizona is among the first to advance a bill to a full floor vote
The fund would be administered by the Arizona State Treasurer and held through qualified custodians, including banks, trust companies, or SEC-approved exchange-traded products. This custodial framework mirrors the approach used by institutional Bitcoin holders and major exchanges that publish proof of reserves to verify asset holdings.
Eligible assets extend beyond Bitcoin. The bill names Bitcoin, XRP, Digibyte, stablecoins, and NFTs, provided they meet a “cryptocurrency fair value score” of at least 1% of the “digital gold standard benchmark.” That benchmark is set at a Bitcoin price of $100,000.
With Bitcoin currently trading around $71,709, the benchmark sits roughly 28% above the current market price, raising questions about how the eligibility threshold will function in practice. The inclusion of stablecoins alongside volatile digital assets suggests the fund is designed for broad flexibility rather than a pure Bitcoin play.
The “Seized Assets” Strategy: Designed to Survive a Veto
The shift from public fund allocation to seized-asset-only funding is a deliberate legislative strategy. By limiting the fund to crypto the state already holds through law enforcement seizures, SB 1649’s sponsors remove the core objection Hobbs raised against the 2025 bills: the risk of investing taxpayer money in volatile assets.
Arizona already signed HB 2324 into law in May 2025, creating a separate “Bitcoin and digital assets reserve fund” specifically for unclaimed property and abandoned digital assets. SB 1649 would expand that framework to include assets from criminal seizures and forfeitures.
Whether this reframing will be enough to secure the Governor’s signature remains an open question. Hobbs has not publicly stated her position on SB 1649 specifically.
Arizona Joins a Nationwide Push for State Bitcoin Reserves
Arizona’s bill is part of a broader wave of state-level Bitcoin reserve legislation that accelerated after President Trump signed an executive order establishing a U.S. Strategic Bitcoin Reserve in early 2025. More than 20 states have since introduced or advanced similar proposals.
Utah, Texas, Oklahoma, and Montana are among the states with active Bitcoin reserve bills at various stages of their legislative processes. The trend reflects growing institutional interest in Bitcoin as a reserve asset, even as enforcement agencies continue to manage seized cryptocurrency holdings through existing legal frameworks.
For SB 1649, the next milestone is a full Arizona Senate floor vote. If approved, the bill moves to the House before reaching the Governor’s desk. The consent calendar placement and Republican Caucus backing suggest strong Senate support, but the House timeline and the Governor’s response remain the key uncertainties.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.