Arizona lawmakers are advancing a proposal to establish a Digital Assets Strategic Reserve Fund that would allow the state to hold certain cryptocurrencies and other digital assets rather than liquidate them. The measure, SB1649, designates the state treasurer to manage the reserve and, under specific risk constraints, could permit limited activities such as staking, airdrops, and lending to generate additional returns.
What SB1649 Would Do
According to the bill text, the Digital Assets Strategic Reserve Fund would consist of digital assets that are held by, confiscated by, or surrendered to the State of Arizona. The treasurer would be authorized to:
- Custody state-held digital assets through a secure custody solution or an approved exchange-traded product.
- Administer the fund directly.
- Engage in staking, receive airdrops, or conduct limited lending if these activities do not increase financial risk to the state.
The bill also provides that digital assets reported as abandoned property may be delivered in their native form to the state or its custodian. If such assets remain unclaimed, any associated staking rewards and airdrops could be transferred into the reserve fund.
How Assets Qualify
SB1649 defines “digital asset” broadly to include cryptocurrencies and other digital-only instruments, provided they meet a fair-value test focused on market use and technical robustness. The test considers factors such as adoption, annual transaction count, annual transaction value, and development activity.
Examples cited in the bill include:
- Bitcoin (BTC)
- XRP
- Stablecoins
- Non-fungible tokens (NFTs)
- Dash
- Internet Computer
- Ravencoin
- Chia
- eCash
- Monero
The framework sets a screening standard before assets can be treated as reserve holdings, indicating that the list is not an open-ended authorization to acquire any token.
Legislative Status
The proposal has cleared the House Rules Committee with an 8–0 vote on March 30 and is headed to a full House vote after earlier passage in the Senate. The measure is not yet law and remains subject to further legislative action.
Why XRP Is Notable
XRP is drawing particular attention because it is explicitly named in the bill alongside Bitcoin. Its inclusion, together with other listed assets, signals which tokens could qualify under the proposed reserve framework if SB1649 is enacted.