Arizona Sets Bold Precedent with Bitcoin Reserve Fund Tied to Unclaimed State Assets Reform

Strategic Move Echoes National Trend Toward State-Led Crypto Infrastructure

Arizona has officially launched a state-run Bitcoin reserve fund, becoming only the second U.S. state to do so after New Hampshire. Signed into law by Governor Katie Hobbs on May 17, 2025, the Bitcoin and Digital Assets Reserve Fund aims to manage unclaimed digital property while modernizing public finance operations. Overseen by the Arizona Department of Revenue, the reserve fund will hold Bitcoin and other verified digital tokens deemed inactive or abandoned. The fund begins with an initial allocation of $35 million in crypto assets, with potential to expand as the state identifies more eligible holdings. This move places Arizona at the forefront of government-level crypto asset management in the United States.

Unclaimed Property to be Reclaimed Through Crypto Custody Model

The law targets a rising challenge: managing unclaimed digital assets, such as dormant cryptocurrency wallets and tokens left behind on exchanges. Arizona estimates over $1.7 billion in unclaimed property statewide, with digital holdings forming an increasing share. Under the new framework, if a digital asset remains inactive for five years, it becomes eligible for inclusion in the reserve fund. The assets will not be liquidated but securely held, preserving potential value for rightful claimants. The law covers a range of assets, including Bitcoin, Ethereum, and stablecoins that meet verification and custody standards. Arizona has committed to maintaining transparent operations, including annual audits by independent blockchain firms and multilayer security procedures for storage.

The law has already drawn national attention for its level of detail and forward-thinking structure. Legal experts say Arizona’s model could become a template for other states pursuing state-level crypto integration. The legislation includes clear provisions on digital wallet protection, regulatory oversight, and real-time tracking of held assets. Blockchain legal consultant Naomi Candler called the law “the most structured crypto custody framework ever implemented at the state level.” While some critics warn of price volatility in holding digital currencies, the state’s approach focuses on long-term digital inclusion and secure asset retention. The law also aligns with growing national conversations around potential digital dollar infrastructure, and Arizona is collaborating with Arizona State University to assess the fund’s fiscal and technological impacts.

States Race to Build Crypto Reserves as Public Finance Evolves

Arizona’s move follows New Hampshire’s early adoption of a similar fund, with several states—like Texas, Missouri, and Wyoming—drafting comparable bills. However, Arizona’s inclusion of the Bitcoin reserve fund within the broader framework of unclaimed property regulation sets it apart. Lawmakers backing the bill say it reflects a larger mission: modernizing government tools to reflect today’s digital economic environment. At a press event, Governor Hobbs stated, “Arizona must lead, not follow, in financial modernization. This law secures unclaimed digital property with 21st-century tools.”

Though some debate remains about the volatility of Bitcoin, the decision to hold rather than trade these assets is seen as a risk-managed stance. Observers also see this law as a proactive step toward potential federal guidance or future CBDC deployment. Arizona’s legal and academic partnerships will track how blockchain-led governance can improve public asset transparency, recovery, and long-term fiscal resilience.