Arizona may soon become the first U.S. state to officially back cryptocurrency as part of its financial strategy. Two bills—SB1025 and SB1373—have cleared the state legislature, largely along party lines, with Republican support and a few crossover Democratic votes. If signed into law, these measures would let the state invest up to 10% of its $31.5 billion fund into Bitcoin and establish a Digital Assets Strategic Reserve Fund to hold various crypto-related assets, including NFTs and stablecoins.

The push places Arizona ahead in a quiet but fast-developing race among states to modernize fiscal policy through blockchain-based assets. Proponents say it’s about future-proofing the state’s financial resilience and hedging against inflation. Others call it reckless, especially in a market known for volatility and lacking regulatory guardrails.

But none of this moves forward unless Governor Katie Hobbs signs off. A Democrat, Hobbs has clashed repeatedly with Republican lawmakers over the state budget. As recently as mid-April, she pledged to veto any bill not tied to a bipartisan funding agreement for disability healthcare—an issue that may now be resolved after she signed a related funding bill last week. Still, she hasn’t commented directly on the crypto legislation.

While Arizona inches toward crypto-backed public finance, Washington remains slow. The U.S. Treasury hasn’t fully disclosed federal digital holdings, delaying the establishment of a national reserve once floated by Donald Trump. Meanwhile, Arizona is making moves that could set a precedent—if Hobbs allows it.

Whether this is pioneering policy or political theater remains to be seen. But one thing’s clear: the line between fiscal responsibility and digital speculation is starting to blur, and Arizona is first to test its balance.

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