Arizona became the first state in the nation that approved legislation and created a strategic bitcoin reserve after both chambers of the legislative power had approved the measure in voices that largely broke along party lines on 28 April.
The legislation, sponsored by the Republican Senator Wendy Rogers, authorizes state protection to invest some of the public funds in Bitcoin (BTC).
According to Details shared By Satoshi Action Fund CEO Dennis Porter, no members were apologized or absent during both votes. The bill took the house 29-25 and the Senate 31-25, with four legislators who did not vote in the Senate.
The bill now goes to Governor Katie Hobbs for consideration. Hobbs has not yet indicated whether it will sign the measure or will be veto.
However, she recently promised to express a veto about all the bills sent to her office until the state legislator accepts a new budget. Hobbs did not give specific comments on SB1025, but is laid down in its broader veto attitude and throws uncertainty about the prospects of the bill.
Backers of the proposal claim that setting up a Bitcoin reserve Arizona could help to diversify its assets, cover themselves against inflation and to put the state first for digital financial innovation.
They point to the fixed offer of Bitcoin and the decentralized nature as benefits compared to traditional Fiat reserves, in particular in the midst of concern about national debt and devaluation of currency.
In the meantime, critics have warned that the extreme price volatility of Bitcoin could expose state funds to a considerable financial risk. Some also expressed concern about the lack of federal regulations on crypto and wondered whether public funds should be used to invest in speculative assets.
According to the language of the bill, Bitcoin Investments would be categorized as digital currency companies in the investment portfolio of the State, subject to supervision and limits defined by the existing regulations of the public fund management of Arizona.
The Arizona initiative comes in the midst of a broader national conversation about the role of digital assets in public finances. Although various state legislators on cryptocurrency-related measures have debated in recent years, Arizona is the first to explicitly authorize a Bitcoin reserve.
Governor Hobbs will now make the final decision and determine whether Arizona will be the first US state to officially integrate Bitcoin into his tax strategy.
