REFERENCE TITLE: state retirement systems; digital assets

State of Arizona

Senate

Fifty-sixth Legislature

Second Regular Session

2024

SCR 1016

Introduced by

Senators Hoffman: Petersen;  Representative Chaplik

A Concurrent Resolution

supporting the potential use of digital assets by the Arizona state retirement system and the public safety personnel retirement system.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Whereas, the landscape of financial investments is rapidly evolving with the advent of digital assets like Bitcoin, which has a market cap of approximately one trillion dollars; and

Whereas, digital assets such as Bitcoin gained significant interest in the realm of exchange traded funds (ETFs); and

Whereas, there are large retirement funds that have dedicated significant seed funding for a proposed spot Bitcoin ETF, signaling growing institutional interest in such investment vehicles; and

Whereas, the global assets under management for firms that have filed for a Bitcoin ETF are over 16 trillion dollars; and

Whereas, the United States Securities and Exchange Commission (SEC) has approved eleven spot Bitcoin ETFs as of January 10, 2024 and the Bitcoin ETFs began trading on January 11, 2024; and

Whereas, pension funds traditionally have exposure to a diverse number of sectors of the economy, including commodities such as gold and silver, which are traditionally invested in via ETFs; and

Whereas, the federal government holds approximately 200,000 Bitcoin; and

Whereas, Arizona's state retirement systems have an obligation to meet the best interests of their members; and

Whereas, the role of Bitcoin and other digital assets in the modern financial ecosystem continues to grow, particularly in the context of ETFs; and

Whereas, it is important that the Arizona State Retirement System and the Public Safety Personnel Retirement System work with the State Treasurer's office to evaluate the potential risks and benefits of investing in Bitcoin and digital asset ETFs, given the evolving regulatory landscape and growing market capitalization.

Therefore

Be it resolved by the Senate of the State of Arizona, the House of Representatives concurring:

      That the Members of the Legislature encourage the Arizona State Retirement System and the Public Safety Personnel Retirement System to:

1. Closely monitor the developments in Bitcoin ETFs and other digital asset ETFs and consider the implications of including such assets in their investment portfolios after, to the extent possible, consulting with any firms that have been granted SEC approval to offer a digital asset ETF.

2. Consider the implications of including a digital asset ETF in their investment portfolios.

3. Submit a comprehensive report on the feasibility, risk and potential benefits of directing a portion of state retirement system monies into digital asset ETFs, including a list of options and recommendations for how this state might safely invest in the digital asset class, to the State Treasurer's office, the President of the Senate and the Speaker of the House of Representatives at least three months before the beginning of the fifty-seventh legislature, first regular session.