Arizona Signs Bill HB 2749: to Establish a Bitcoin and Digital Asset Fund to Foster Zero-Tax Fiscal Innovation
On May 8, 2025, the state of Arizona Governor Katie Hobbs signed HB 2749, establishing the nation's second "Bitcoin and Digital Asset Reserve Fund." The fund incorporates crypto assets that have been unclaimed for over three years into the state treasury and generates revenue through staking and airdrops of digital assets, without relying on taxpayer funds. The passage of this bill received bipartisan support, which marks an important milestone in the governance of digital assets and innovation in public finance in Arizona.
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Arizona Signs Bill HB 2749: to Establish a Bitcoin and Digital Asset Fund to Foster Zero-Tax Fiscal Innovation
On May 8, 2025, the state of Arizona Governor Katie Hobbs signed HB 2749, establishing the nation's second "Bitcoin and Digital Asset Reserve Fund." The fund incorporates crypto assets that have been unclaimed for over three years into the state treasury and generates revenue through staking and airdrops of digital assets, without relying on taxpayer funds. The passage of this bill received bipartisan support, which marks an important milestone in the governance of digital assets and innovation in public finance in Arizona.
Core Content of the Bill: Conversion of Unclaimed Assets into State Reserves
The legislative focus of Bill HB 2749 is to amend Arizona's Unclaimed Property Act to formally include digital assets in the category of "unclaimed property." According to the new regulation, if the holder of a crypto asset does not log in, trade, or engage in any identifiable activity for three years, the asset will be considered "abandoned" and will be transferred to state government management according to the law.
These assets will be included in the newly established "Bitcoin and Digital Asset Reserve Fund," managed by the State Treasurer. The fund's establishment is entirely independent of state government budget allocations and does not use any taxpayer money, making it a "budget-neutral" mechanism.
Investment Strategy and Revenue Mechanism: Staking and Airdrops as Revenue Sources
Unlike other states that only hold Bitcoin, Arizona's HB 2749 does not set a market value or liquidity threshold for digital assets that can be included in the fund. As long as the assets legally belong to the state government, they can be included in the fund, whether it's Bitcoin, Ethereum, or even meme coins with daily trading volumes of only tens of thousands of dollars.
These assets are not only passively held but can also participate in network-wide staking and receive airdrops and other on-chain revenue sharing. All earnings will automatically roll into the fund, creating a compounding effect. This makes Arizona the first state in the U.S. to allow state treasury participation in on-chain operations.
However, this also means that the state government must bear on-chain risks, including validator slashing, smart contract vulnerabilities, and other technical losses. If losses occur, they will be directly reflected in public sector accounts.
Custody and Regulation: Compliance Institutions Responsible for Asset Custody
According to the bill's provisions, all digital assets must be entrusted to a licensed compliant custody institution in Arizona. These institutions must meet U.S. regulatory standards to ensure asset safety and operational transparency.
Additionally, the bill prohibits the state government from selling assets below market price and requires all transactions to be conducted through recognized digital asset exchanges or other "commercially reasonable" methods, especially for tokens with lower liquidity.
In terms of information disclosure, the fund's operations must be included in the annual financial report and can only be used through the state legislature's appropriation process. However, the provisions do not mandate the public disclosure of on-chain addresses, resulting in a transparency gap compared to decentralized standards.
Political Support and Legislative Process: Bipartisan Consensus Drives Passage
HB 2749 was spearheaded by Republican Representative Jeff Weninger and, after multiple public hearings and bipartisan negotiations, ultimately passed with bipartisan support. After the bill's signing, Weninger stated, "Digital assets are not just the future; they are the present. This bill ensures that Arizona will not let value slip away and positions us as a national leader."
The nonprofit organization Satoshi Action Fund provided technical assistance during the bill's drafting process and collaborated with industry institutions like Coinbase to help legislators clarify the practical financial and technical impacts of digital assets. The foundation's CEO, Dennis Porter, stated, "Arizona has shown the nation how to turn forgotten assets into a fortress against inflation."
Use and Restrictions of Funds: Bitcoin Lock-Up, Partial Use of Non-BTC Assets
According to the provisions of HB 2749, the Bitcoin portion will be permanently locked and cannot be used unless otherwise legislated. Non-Bitcoin assets allow the state treasurer to convert up to 10% into cash to subsidize general fund expenditures. This design retains the potential for asset appreciation while also providing a certain degree of liquidity management space.
Additionally, if the original unclaimed asset is Bitcoin, the state government will allow the original holder to reclaim the native Bitcoin in the future, rather than converting it to dollars, reflecting respect for asset ownership.
Comparison with Other States: The Uniqueness of the Arizona Model
Arizona's approach contrasts sharply with New Hampshire's HB 302 bill. New Hampshire adopts a conservative strategy of active appropriation, single Bitcoin focus, market value thresholds, and a 5% allocation cap; whereas Arizona centers on "passive acquisition," allowing diverse assets into the treasury and creating revenue through staking and airdrops, with both higher risks and potential rewards.
Furthermore, Arizona's fund does not use public funds, politically representing a "zero-cost" stance, reducing opposition. This design also provides a policy template for other states, especially against the backdrop of fiscal pressure and the rise of digital assets.
