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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
digital assets strategic reserve fund
Purpose
Establishes the Digital Assets Strategic Reserve Fund (Fund), administered by the State Treasurer, and consisting of monies appropriated by the Legislature and digital assets seized by the state. Allows the State Treasurer to loan digital assets from the Fund, if the loan does not increase financial risk to the state.
Background
The State Treasurer is responsible for the safekeeping of all securities
for which the State Treasurer is the lawful custodian. The State Treasurer
invests state monies with consideration for the probable safety of capitol and
the probable rate of return over extended periods of time. The State Board of
Investment (BOI) reviews the investment activities of the State Treasurer
(Ariz.
Const. art. 10 ยง 7).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Establishes the Fund, administered by the State Treasurer, and consisting of monies appropriated by the Legislature and digital assets seized by the state.
2. Requires the State Treasurer to deposit digital assets seized by the state in the Fund through the use of a secure custody solution by a qualified custodian or in a form of an exchange traded product that is issued by an investment company registered in Arizona.
3. Prohibits the State Treasurer from investing more than 10 percent of the total amount of Fund monies in any given fiscal year.
4. Allows the State Treasurer to:
a) loan digital assets from the Fund to generate additional returns, if the loan does not increase any financial risks to the state; and
b) adopt rules necessary to administer the Fund.
5. Specifies that Fund monies are continuously appropriated and exempt from lapsing.
6. Defines digital assets to include virtual currency, virtual coins and cryptocurrency or native on-chain assets, including Bitcoin, stablecoin, a non-fungible token and any other digital-only assets that confer economic, proprietary or access rights or powers.
7. Defines terms.
8. Becomes effective on the general effective date.
Prepared by Senate Research
February 12, 2025
MG/AL/ci