Arizona Enacts Law to Claim Abandoned Crypto and Launch Bitcoin Reserve Fund

Arizona Embraces Abandoned Crypto with New State Law

In a landmark move, Arizona Governor Katie Hobbs has signed legislation that allows the state to take custody of abandoned cryptocurrency and convert it into a public digital asset reserve—potentially making Arizona the first U.S. state to actively manage unclaimed crypto for public benefit.

The new legislation, House Bill 2749, was signed into law on May 7, 2025. Under the law, if a digital asset such as Bitcoin or Ethereum remains unclaimed and the owner is unresponsive to communications for three consecutive years, Arizona will have the authority to declare it abandoned property and transfer it to state ownership.

The law not only outlines the legal process for declaring assets unclaimed but also allows state custodians to stake the assets to earn rewards or accept airdropped tokens, with any profits funneled into a newly created entity: the Bitcoin and Digital Asset Reserve Fund.

According to the bill’s sponsor, Rep. Jeff Weninger, the legislation was crafted to help Arizona become a national leader in crypto policy while respecting property rights. “This law ensures Arizona doesn’t leave value sitting on the table and puts us in a position to lead the country in how we secure, manage, and ultimately benefit from abandoned digital currency,” Weninger said in a statement following the bill’s signing.

No Taxpayer Funds Involved, State Gains Strategic Digital Asset Exposure

One of the most notable aspects of the law is its clear stipulation that no taxpayer dollars or general state funds will be used to establish or maintain the reserve fund. Instead, all contributions to the fund will originate from abandoned digital assets and the rewards or profits they generate.

Jeff Weninger

These assets may include native crypto rewards from staking mechanisms, as well as airdrops distributed to digital wallets controlled by the state. This approach represents a strategic and relatively low-risk way for the state to gain exposure to blockchain-based value systems, all while remaining within a property rights framework.

State officials managing the assets are expected to implement custody and security protocols that align with existing fiduciary standards, though further regulatory guidance on crypto-specific risk management is expected in the months ahead.

Governor Hobbs Vetoed Related Crypto Bill Days Earlier

The passage of HB 2749 comes just days after Governor Hobbs vetoed Senate Bill 1025—a bill that proposed allowing the state to invest seized or forfeited funds directly into Bitcoin. That bill had generated significant attention in the crypto community but was ultimately rejected by Hobbs over concerns about the risks of using public funds to invest in “untested assets.”

However, her willingness to approve HB 2749, which deals with unclaimed rather than seized assets and avoids taxpayer exposure, has renewed optimism among crypto advocates. The distinction suggests Hobbs may be open to cautious, structured forms of state-level crypto engagement, provided they carry minimal financial risk to the public.

Hope Builds for Senate Bill 1373: Arizona May Invest in Bitcoin

Crypto policy watchers are now turning their attention to another bill awaiting Governor Hobbs' decision: Senate Bill 1373. This proposed legislation would give Arizona’s treasurer, Kimberly Yee, the authority to allocate up to 10% of the state’s Budget Stabilization Fund (also known as the "Rainy Day Fund") into Bitcoin.

Although this proposal involves the use of public funds—unlike HB 2749—it is seen as a more structured, long-term investment strategy in contrast to SB 1025, which focused on seized assets. With HB 2749 now signed into law, supporters believe Hobbs may be more receptive to SB 1373, especially as interest in digital assets grows among U.S. state governments.

Julian Fahrer, founder of Bitcoin Laws, expressed hope on social media that Hobbs' signature on HB 2749 “offers more promise” for further progressive crypto legislation in Arizona.

Arizona Follows New Hampshire’s Lead on State-Level Crypto Policy

Arizona’s new crypto law follows a similar move by New Hampshire, where Governor Kelly Ayotte signed House Bill 302 into law on May 6, 2025. That legislation authorizes the state treasury to invest in cryptocurrencies with a market capitalization of over $500 billion—a criterion currently only met by Bitcoin.

Together, these developments suggest a growing willingness among state governments to explore responsible crypto integration into fiscal policy, especially when focused on public benefits and long-term reserves rather than speculative trading.

Conclusion: Arizona Signals Bold but Balanced Approach to Crypto Policy

Arizona’s adoption of HB 2749 positions it at the forefront of state-level crypto innovation, signaling a bold yet measured approach to managing digital assets. By transforming unclaimed cryptocurrencies into a state-managed fund—with no reliance on taxpayer dollars—the state is experimenting with a new fiscal model that may inspire similar legislation across the U.S.

As crypto becomes an increasingly relevant asset class in global finance, Arizona’s legislative steps represent a case study in how states can integrate blockchain technologies and digital assets without compromising fiscal responsibility or regulatory clarity.