Arizona is on the verge of becoming the first U.S. state to create a Bitcoin reserve funded by digital assets seized from criminal cases. House Bill 2324 (HB2324), which proposes the establishment of a digital asset reserve, has cleared both chambers of the state legislature and now awaits the signature of Governor Katie Hobbs to become law.

This development marks a significant shift in how the state handles cryptocurrency obtained through legal forfeitures. If signed, the measure would make Arizona a national leader in formalizing crypto seizure policies and creating a digital reserve fund.

What HB2324 Proposes

Under HB2324, Arizona law enforcement agencies would be authorized to seize cryptocurrencies linked to criminal activity and store them securely in government-approved digital wallets. The bill lays out specific guidelines for handling these digital assets to ensure they are protected against loss or misuse.

Once the assets are seized, the first $300,000 in value is allocated to the state Attorney General’s office to support legal operations. The remaining amount is then divided into three parts: 50% goes back to the Attorney General, 25% is directed to the state’s general fund, and 25% is allocated to the newly established Bitcoin reserve.

This move aims to not only modernize Arizona’s forfeiture laws but also create a long-term digital asset reserve that could potentially serve the state’s financial interests in the future.

Legislative Journey: A Rocky Road to Approval

HB2324 initially faced resistance. When first introduced in early May, the bill was rejected by the Arizona House of Representatives. However, momentum shifted in mid-June when it narrowly passed the Senate with a 16–14 vote. The turnaround was largely attributed to Senator Janae Shamp, a Republican who initially voted against the bill but later filed a motion to reconsider.

With renewed support, the bill returned to the House and passed, setting the stage for final consideration by the governor. All eyes are now on Governor Hobbs, who holds the power to either sign the bill into law or veto it.

How It Differs From Past Proposals

This is not the first time Arizona has considered building a Bitcoin reserve. Earlier this year, Governor Hobbs signed HB2749, a separate bill that allows the state to claim unclaimed digital assets that have been abandoned for over three years. These assets are then managed by the Department of Revenue. However, HB2749 does not involve law enforcement seizures or tie directly to criminal activity.

In contrast, HB2324 focuses on assets obtained through legal forfeiture, making it the first attempt to establish a Bitcoin reserve directly linked to criminal enforcement proceedings.

Two previous proposals, SB1373 and SB1025, sought to allow the state to invest directly in cryptocurrencies like Bitcoin. Both were ultimately vetoed by the governor due to concerns about financial risk and unclear regulatory guidance.

HB2324 appears to have struck a more cautious balance, aiming to utilize assets that are already in the state’s possession rather than investing taxpayer money into digital currencies.

Broader Implications for Crypto and Law Enforcement

If the bill becomes law, it could create a precedent for other U.S. states considering how to manage seized crypto. With digital assets increasingly used in crimes ranging from fraud to drug trafficking, law enforcement agencies are seizing more cryptocurrencies than ever before. However, the lack of clear policies for managing and storing these assets poses a major challenge.

HB2324 addresses this issue by requiring law enforcement to use “approved digital wallets,” which are expected to meet high standards for security and transparency. This not only protects the value of the seized assets but also builds public trust in how these new types of assets are being handled.

Some experts see Arizona’s move as a sign that cryptocurrencies are being taken more seriously by state governments—not just as an investment tool, but as a part of public finance and legal infrastructure.

What Comes Next

Governor Katie Hobbs now has the final say. If she signs HB2324, Arizona will become the second state to formalize digital asset reserves and the first to tie it directly to law enforcement activity. This would give the state a legal mechanism to benefit from the rising value of seized cryptocurrencies, while also reinforcing its commitment to strong regulatory oversight.

On the other hand, if the bill is vetoed, it could slow down momentum for similar legislation in other states and force Arizona lawmakers to revisit the drawing board.

For now, the bill sits on the governor’s desk, awaiting action. Lawmakers and the crypto community alike are watching closely to see whether Arizona will take this historic step toward building the country’s first state-run Bitcoin reserve funded entirely by confiscated digital wealth.