Arizona is about to have a state-run bitcoin and Digital Assets Reserve Fund thanks to the passage of House Bill 2324 (HB 2324). The bill passed both chambers of the state legislature and is now awaiting Governor Katie Hobbs’ signature to become law.
The Arizona House of Representatives passed the bill 34-22 and the Senate passed it 16-14. The legislation now goes to the Governor.
If signed, HB 2324 will be Arizona’s second bitcoin-related reserve law, following HB 2749 which Governor Hobbs signed in May. That bill allowed the state to keep unclaimed bitcoin in its original form and redirect staking rewards into a state-managed fund.
Unlike previous bills that proposed using public money or state investment funds to buy bitcoin, HB 2324 takes a more cautious approach.
It only uses assets already seized during criminal investigations. This is in response to Governor Hobbs’ concerns when she vetoed other bitcoin reserve bills, SB 1025 and SB 1373, because of the risks of investing state funds in volatile digital assets.
The Bitcoin and Digital Assets Reserve Fund will be managed by the State Treasurer. It will only consist of digital assets like bitcoin and stablecoins that have been confiscated through criminal asset forfeiture.
The treasurer will have the authority to hold, invest, reinvest or sell these assets as needed.
According to the bill, the first $300,000 in seized digital assets from any criminal case will go to the Anti-Racketeering Revolving Fund (ARRF) which supports law enforcement. Anything above that will be split three ways:
- 50% to the ARRF
- 25% to the state’s General Fund
- 25% to the new Reserve Fund
The bill also outlines rules for seizure, storage and liquidation of digital assets including secure custody practices, third-party custodians and state-approved digital wallets.
This bill is a change in Arizona’s approach to digital assets. Previous efforts were to invest directly in bitcoin using public funds — a strategy that many officials including Governor Hobbs didn’t like.
Proponents say HB 2324 doesn’t use tax dollars for speculation. It’s a structured solution to a real problem: what to do with digital assets seized during criminal investigations as law enforcement engages with fraud, drug trafficking and money laundering cases.
The new reserve fund will allow the state to hold onto the seized bitcoin and benefit from price increases instead of having to liquidate the assets immediately.
The bill’s supporters framed it as a law enforcement and asset management bill, not a bitcoin investment tool. It’s about managing digital assets already seized legally and not spending taxpayer money.
The language of the bill also learned from past failures. HB 2324 excludes state treasury or pension funds from being used to buy bitcoin, and limits the reserve to seized digital assets only. This structure helped the bill pass after it failed in May.
The governor has not signed the bill yet but many think she will since it’s a more limited scope and law-enforcement focused.
