Arizona is moving forward with a new Bitcoin reserve bill. This legislation allows public funds and pensions to invest in Bitcoin. It marks a big step in how the state approaches cryptocurrency.
The Arizona State Senate Finance Committee has approved the Strategic Bitcoin Reserve Act (SB1025). This bill aims to use Bitcoin as a savings tool for the state. It passed with a vote of five to two on January 27. Next, it will go to the Senate Rules Committee for more discussion and possible changes. If the Senate approves it, the bill will head to the House of Representatives.
The proposed law creates a strategic Bitcoin reserve managed by the US Treasury. This reserve will store government Bitcoin holdings. Other public funds can also keep their digital assets in a secure account within this reserve.
The bill allows government entities to invest up to 10% of their capital in Bitcoin (BTC) and other digital assets. It also opens the door for pension funds to invest in Bitcoin. This could increase public interest in cryptocurrencies. In fact, reports show that up to 20% of Generation Z and Alpha are open to receiving their pensions in cryptocurrency. Additionally, 78% of them trust alternative retirement savings options more than traditional pension funds, according to Cointelegraph.
Arizona's decision could inspire other states to follow suit. Anndy Lian, an author and blockchain expert, mentioned that if Arizona invests tax dollars in Bitcoin, it might encourage states like Texas and Pennsylvania to consider similar moves more quickly.
However, Lian also cautioned that a Bitcoin reserve needs protective measures. Cryptocurrency can be volatile, and taxpayers could face financial risks similar to those of crypto investors.
On another note, the Bitcoin Act, led by Senator Cynthia Lummis from Wyoming, is one of the most anticipated crypto-related bills. If approved nationwide, it could push Bitcoin's price above a million dollars. Adam Back, co-founder and CEO of Blockstream, believes this could happen soon.
Back noted that the market hasn’t fully priced in this possibility yet. There are at least 13 other Bitcoin reserve bills in various states, including Massachusetts, Pennsylvania, Kansas, New Hampshire, Wyoming, Ohio, Utah, and North Dakota.
Support for these proposals is growing across the US. This trend follows former President Donald Trump’s pro-crypto policies and a recent executive order on cryptocurrency. If the Bitcoin Act passes, it could attract many institutional investors. Anastasija Plotnikova, co-founder and CEO of Fideum, stated that this could drive Bitcoin’s price toward $500,000, bringing in pension and sovereign wealth funds. This would further legitimize Bitcoin as an asset class.