Arizona Lawmakers Back State Crypto Reserve: A Glimpse of Future Legislation?

Arizona’s legislature has sent two bills to the governor’s desk that would authorize the formation of a strategic reserve of digital currency, which would make it the first state in the nation to do so.

The action comes after the Trump administration’s creation of a central bank for digital money and comes amid similar efforts In various state legislatures across the nation, some of which have already done so, been shot down .

On Monday, the Arizona lawmaking body ratified a bill This would establish a strategic reserve fund funded through digital assets confiscated by the government, adhering to the financing structure of the federal crypto reserve.

The other bill The House has passed legislation allowing the state treasurer to hold up to 10 percent of the state’s public funds and retirement systems in a virtual currency fund.

The votes on the Arizona bills were largely divided along party lines, passing with significant backing from Republicans and facing nearly unanimous disapproval from Democrats.

The office of Governor Katie Hobbs, who belongs to the Democratic Party, refused to make any remarks regarding her potential veto of the bills.

Matthew Sigel, who leads digital asset research at VanEck, suggests that Arizona Democrats might urge Governor Hobbs to reject the cryptocurrency reserve bills. However, he admits that predicting the governor’s actions remains "speculative."

Despite Hobbs vetoing the bills, other states are mulling over comparable legislation, and Sigel believes it’s only a question of when one will eventually get approved.

I believe one of these bills will likely get approved due to the compelling incentives," he explains. "As the dollar loses value at this rate, states frequently end up bearing the burden, making Bitcoin quite appealing... Since states cannot mint currency, they're more motivated to investigate these store-of-value methods using their current reserves.

Bitcoin provides an opportunity to capitalize on what’s known as "stranded energy," Sigel notes. He explains that electricity constitutes the primary expense in Bitcoin mining, and operations lacking access to affordably priced power will likely incur losses. In regions where renewable sources like solar and wind generate ample energy but lack infrastructure for distributing these resources to densely populated coastal areas, establishing a cryptocurrency mining facility allows this energy to be utilized efficiently at minimal cost.

Momentum has been growing for measures like the Arizona bill ever since Trump regained power and became an outspoken supporter of cryptocurrencies. This includes his family’s involvement in the sector as well. raised concerns regarding possible conflicts of interest .

“The tone starts at the White House,” says Sigel, who notes that Trump often mentions crypto alongside energy independence and artificial intelligence. “The three are inextricably linked. Bitcoin and AI both require a lot of energy. You can only make money Bitcoin mining when you have a very cheap cost of energy.”

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