Arizona SB 1649 Digital Assets Strategic Reserve Fund

The bill would have established a Digital Assets Strategic Reserve Fund consisting of digital assets “held by, confiscated by or surrendered to” Arizona. Under the Senate-engrossed text, the State Treasurer would have been required to deposit state-held digital assets in the fund using either a secure custody solution provided through a qualified custodian or a qualifying exchange-traded product. The Treasurer would also have administered the fund.

SB 1649 would have allowed the Treasurer to invest monies deposited in the fund during a fiscal year and to loan digital assets from the fund to generate additional returns, but only if the loan did not increase financial risk to the state. The language did not itself appropriate funds or set a mandatory allocation among assets.

SB 1649 defined a “qualified custodian” to include a federal or state-chartered bank, trust company, special purpose depository institution, certain state-regulated companies with custody of virtual currency for an approved exchange-traded product, or a technology provider of a secure custody solution. The proposed secure-custody requirements addressed private-key access, encrypted environments, hardware security, geographically diversified secure data centers, multiparty governance, action logging, code audits, penetration testing, vulnerability remediation, and disaster recovery.

The exchange-traded-product definition referred to instruments traded on a United States-regulated exchange and approved by the SEC, the CFTC, or the Arizona Department of Insurance and Financial Institutions. The provision would have allowed the Treasurer to hold eligible assets through regulated product structures rather than direct wallet custody in some circumstances.

The Senate-engrossed bill also amended Arizona’s abandoned-property delivery statute. If abandoned property reported to the department was a digital asset, the holder would have delivered the asset in native form to the department or a designated qualified custodian within thirty days after reporting it abandoned. The text also addressed staking rewards and airdrops, directing certain rewards to the Bitcoin and Digital Assets Reserve Fund after three years if the property remained unclaimed.

SB 1649 was introduced in the Senate on February 3, 2026. It passed the Senate Finance Committee on February 16, cleared Senate third reading on March 9 by a 16-13 vote, and was transmitted to the House. The House Commerce Committee and House Rules Committee advanced the bill in March, and the House Committee of the Whole reported “Do Pass” on April 15. The bill then failed House third reading on June 9, 2026, with 23 yeas, 31 nays, and six not voting.

Because SB 1649 failed that House vote and was not signed into law, this profile should be treated as a record of an Arizona digital-asset reserve proposal rather than an operative statute. Any later reconsideration, reintroduction, or successor bill should be tracked separately.