Arizona Governor Signs Law for Abandoned Digital Assets

Categories: Arizona Business NewsArizona State News

A representation of Arizona's new law on abandoned digital assets with cryptocurrency symbols.

News Summary

Arizona has made a significant move in managing digital assets, with Governor Katie Hobbs signing House Bill 2749 into law. This legislation allows the state to claim ownership of abandoned digital assets, mainly unclaimed cryptocurrencies, after three years. It establishes a Bitcoin Reserve Fund to manage these assets without taxpayer money. The law supports property rights and aims to position Arizona as a leader in digital asset management. The bill highlights a growing trend toward cryptocurrency acceptance in state legislation and could pave the way for additional crypto-related laws.

Arizona Governor Signs Law for Abandoned Digital Assets

Arizona has taken a significant step toward the integration of digital assets into state finance with Governor Katie Hobbs’ signing of House Bill 2749 into law on May 7. This new legislation allows the state to claim ownership of digital assets that have been abandoned for at least three years, primarily targeting unclaimed cryptocurrencies.

House Bill 2749 establishes a framework for Arizona to manage abandoned digital assets by creating a “Bitcoin Reserve Fund.” Uniquely, this fund will not utilize taxpayer money or state funds. The law empowers state custodians to stake the abandoned cryptocurrencies, enabling the generation of rewards or the receipt of airdrops. These rewards and airdrops will then contribute to the Bitcoin and Digital Asset Reserve Fund, potentially providing a new revenue stream for the state.

The bill is sponsored by Jeff Weninger, who emphasized that it aims to position Arizona as a leader in securing and managing abandoned digital currency. He noted that the law safeguards property rights and ownership, while also providing the necessary tools for the state to account for digital assets.

Key Provisions of the Law

According to the newly signed law, digital assets will be presumed abandoned after three years, unless the owner actively engages with the asset in the interim. Furthermore, the law explicitly prohibits the state from selling digital assets below the prevailing market exchange prices. It integrates digital assets into Arizona’s existing unclaimed property laws, enhancing the state’s fiscal management of these new forms of wealth.

In terms of operational execution, the digital assets acquired by the state can be actively staked by a qualified custodian to maximize returns. This innovative approach distinguishes Arizona’s law while remaining budget-neutral, a feature that appealed strongly to Governor Hobbs compared to other proposals she evaluated.

Legislative Background

This move comes after Governor Hobbs vetoed Senate Bill 1025 on May 3. The bill would have permitted the state to invest seized funds into Bitcoin. Concerns surrounding public funds and untested assets led to the veto. The recent signing of HB 2749 has sparked optimism regarding the potential for further crypto-related legislation, specifically Senate Bill 1373. This Senate bill seeks to authorize Arizona’s treasurer to allocate up to 10% of the state’s Budget Stabilization Fund into Bitcoin.

The legislative landscape is evolving across the United States, highlighted by New Hampshire’s recent enactment of House Bill 302. This law allows that state to invest in cryptocurrencies boasting a market capitalization exceeding $500 billion, with Bitcoin being the only cryptocurrency currently meeting that criterion. While Arizona’s approach may appear less aggressive compared to New Hampshire’s, it marks a substantial progression in the state’s consideration of digital asset legislation.

The signing of House Bill 2749 not only seeks to manage abandoned digital assets but also indicates a broader trend towards cryptocurrency acceptance at the state level. As Arizona looks to the future, the effectiveness of this legislation will be closely monitored, especially in light of the rapidly evolving digital currency landscape.

In conclusion, Arizona’s new law potentially sets a precedent in how states could engage with and benefit from abandoned digital assets, while also reflecting an increasing recognition of the importance of cryptocurrencies in today’s economy.