Arizona Senate moves forward with Bitcoin reserve legislation

Arizona lawmakers have advanced a Bitcoin strategic reserve bill, which seeks to deploy the world’s first cryptocurrency as a savings technology for the state.

The bill will now move to the Senate Rules Committee for final debate and amendments. Approval by the Senate would advance the bill to the House of Representatives.

The bill proposes the creation of a strategic Bitcoin reserve by the US Treasury for “the storage of government Bitcoin holdings,” which would also allow other public funds to store their digital assets in a “secure, segregated account within the strategic Bitcoin reserve.”

Arizona’s decision to include Bitcoin in its financial strategy could lead to a domino effect among other states, according to Anndy Lian, author and intergovernmental blockchain expert.

He told Cointelegraph:

“Imagine if your state decided to put some of your tax dollars into Bitcoin; it might encourage places like Texas or Pennsylvania, where they've already been talking about similar ideas, to jump on the bandwagon quicker.”

However, Lian cautioned that a Bitcoin reserve would require safeguards due to cryptocurrency’s volatility, noting that taxpayers could face financial risks similar to those encountered by crypto investors.

Bitcoin price to $1 million on federal Bitcoin Reserve Act?

The potential approval could lead to a rapid price appreciation, as market participants have yet to price in this likelihood, wrote Back in a Nov. 18 X post.

The success of the bill could bring an influx of new institutional Bitcoin adopters, according to Anastasija Plotnikova, co-founder and CEO of Fideum.

The regulatory expert told Cointelegraph:

“Analysts suggest it could drive Bitcoin’s price toward $500,000 while attracting institutional investors like pension and sovereign wealth funds, further legitimizing Bitcoin as an asset class.”