In a significant legislative move, the Arizona Senate Finance Committee voted 4-2 on February 16, 2026, to advance SB1649, which proposes the establishment of a Digital Assets Strategic Reserve Fund. This initiative would enable Arizona to manage and store a variety of cryptocurrencies, including Bitcoin (BTC), XRP, DigiByte, approved stablecoins, and non-fungible tokens (NFTs) within a state-controlled treasury reserve.
Should the bill successfully pass through both the full Senate and the House, it would require the signature of Governor Katie Hobbs to become law. Currently, it progresses to the Senate Rules Committee for further consideration. This legislation builds on the foundation laid by HB2749, which created reserves for unclaimed digital assets, marking a continued effort by Arizona to embrace institutional adoption of cryptocurrencies.
Under the provisions of SB1649, the Arizona state treasurer would be responsible for overseeing the custody of these digital assets, utilizing qualified custodians or registered exchange-traded products (ETPs) located within the state. The fund would be populated exclusively from forfeited or surrendered digital assets, ensuring that no taxpayer funds or direct purchases would be involved in its creation.
Importantly, the legislation allows for the lending of these assets to generate yield, provided that the approach remains risk-neutral and does not impact the state”s general fund. To determine eligibility for inclusion in the reserve, a “cryptocurrency fair value score” will be employed, which evaluates factors such as market capitalization, transaction volume, and decentralization, specifically requiring assets to have at least 1% of Bitcoin”s benchmark. Among the assets explicitly listed as qualifying are BTC, XRP, and DigiByte.
The advancement of this bill has already garnered attention in the cryptocurrency market, particularly for XRP, which traded in the $1.40 to $1.44 range following the vote. Proponents view this measure as a considerable institutional endorsement. Concurrently, Bitcoin has faced downward pressure amid broader crypto market challenges and macroeconomic headwinds.
If enacted, Arizona would join the ranks of states like Texas and New Hampshire, which have established similar crypto treasury reserves. This move could set a precedent for other U.S. territories, reframing confiscated digital assets as strategic resources rather than immediate liquidation targets.
