US State of Arizona Creates Bitcoin Reserve Fund With Abandoned Digital Assets

• Arizona Creates Bitcoin Reserve Fund With Unclaimed Assets
• Law allows use of staking rewards and airdrops
• State avoids using public funds in cryptocurrency investments

The state of Arizona has taken a significant step toward cryptocurrency adoption by passing new legislation that establishes a reserve fund comprised of digital assets. The measure allows the state to use abandoned crypto assets, staking rewards, and unclaimed airdrops to generate financial returns without tapping into the state treasury or retirement funds.

The law was approved after a previous bill that proposed investing up to 10% of the state's assets directly in crypto assets was vetoed. In justifying the veto, authorities pointed to the need to maintain more conservative investment strategies for pension funds.

ARIZONA SIGNS STRATEGIC BITCOIN RESERVE INTO LAW! 🇺🇸 pic.twitter.com/xQXsm2fEXQ

—Dennis Porter (@Dennis_Porter_) May 8, 2025

The legislation defines that digital assets are considered abandoned after three years of inactivity, unless the owner performs actions such as logging in, making a transaction or formal contact. These assets, once unclaimed, will become part of the new reserve fund, which will be managed by a qualified custodian.

The proposal had bipartisan support and was designed to not impact the state budget. The fund could generate revenue for the state from the active use of digital assets, while respecting rules that prohibit their sale below market value. For less liquid tokens, sales must follow commercially reasonable practices.

With this measure, the state joins others that are also studying ways to integrate cryptocurrencies into public finances, but adopts a more conservative approach by not allowing the use of public money for direct purchases of crypto assets. The initiative represents a milestone in the construction of a legal framework for dealing with digital assets in the state public sector.