In a bold move that could place it at the forefront of state-level cryptocurrency adoption, Arizona’s State Legislature has approved two key Bitcoin-focused bills—SB1025 and SB1373. These bills now head to the desk of Governor Katie Hobbs, whose signature would officially establish Arizona as the first U.S. state to create a Strategic Bitcoin Reserve.

The passage of these two bills comes amid a surge in interest from several U.S. states exploring the potential of digital assets as part of their public financial strategies. SB1025, the more ambitious of the two, authorizes Arizona to allocate up to 10% of its public funds to purchase and hold Bitcoin or other approved digital assets. This makes it one of the most concrete steps any state has taken in integrating crypto into government reserves.

SB1373 complements this effort by solidifying Arizona’s broader interest in creating a crypto-friendly regulatory environment, further demonstrating the state’s commitment to digital asset innovation. Both bills passed with comfortable margins in the legislature, signaling strong political momentum for the initiative.

Governor Hobbs has been a key figure in the final stretch of this legislation. Until recently, she had vowed to veto all pending bills over a separate funding dispute involving Arizona’s Division of Developmental Disabilities. However, with that standoff now resolved, political analysts and crypto advocates alike are hopeful that she will sign both crypto bills into law in the coming days.

If enacted, Arizona will effectively jump ahead of several other states also vying for crypto leadership. States like South Carolina, Texas, and New Hampshire have introduced similar proposals, but none have made it as far through the legislative process as Arizona. While many of these proposals had aimed for sizable Bitcoin allocations—some reaching tens of billions of dollars—resistance from fiscal conservatives led to caps and revised versions of the bills. Arizona’s 10% limit mirrors the structure of South Carolina’s bill, creating a model that might be easier for other states to replicate.

Although some Bitcoin maximalists may view the spending cap as a limitation, others see Arizona’s effort as a vital first step. In a national environment where federal-level crypto policy remains fragmented, state-led efforts could serve as crucial blueprints for broader adoption. Even a modest Bitcoin allocation by a state government may boost market confidence and set the stage for more institutional involvement.

This legislative push also comes at a time when global government holdings of Bitcoin are trending downward. Several nations, including Germany and Ukraine, have liquidated their BTC reserves, largely for fiscal or wartime reasons. Meanwhile, the U.S. federal government, while holding significant amounts of Bitcoin, has acquired it primarily through seizures rather than strategic purchases.

Arizona’s move could, therefore, signal a shift toward proactive accumulation by government entities rather than passive or incidental holding. That possibility alone has injected new energy into Bitcoin markets, with many seeing this as a bullish development that may stimulate demand and long-term holding trends.

Other states are watching closely. Both New Hampshire and Texas have similar bills pending a Senate vote. Should Arizona finalize its Bitcoin Reserve plans, it may encourage other legislatures to push their proposals forward with greater urgency.

While nothing is guaranteed until Governor Hobbs adds her signature, Arizona is now closer than any U.S. state has ever been to creating a Bitcoin reserve. Whether or not it’s the start of a broader state-level trend, it certainly marks a historic moment for crypto policy in the United States.