Senate advances digital-assets bill after debate over 'Bitcoin reserve' and custodial handling of unclaimed crypto

The Arizona Senate on Wednesday voted to pass House Bill 2749, a measure the transcript describes as setting procedures for state handling of forfeited or unclaimed digital assets. The bill passed on third reading by a recorded roll-call of 20 ayes, 8 nays and 2 not voting.

Why it matters: The measure creates a statutory framework for how the state treats cryptocurrency and other digital assets found in unclaimed-property cases — a point of contention as states nationwide weigh whether to hold crypto in ‘‘native form’’ or convert holdings to dollars for the general fund.

What senators argued: Senator Epstein explained her opposition at length, framing two central concerns: (1) potential state endorsement of cryptocurrency through a Bitcoin reserve and (2) the mismatch between custodians who hold stocks and those who can securely hold crypto.

"The problem with the Bitcoin reserve is that as we create more and more Bitcoin reserves in states... it will juice up the price of Bitcoin," Senator Epstein said in a floor explanation, adding that she was worried the state could be seen as "artificially propping up the price of that asset." She closed her remarks: "I vote no."

Senator Meznard, speaking for supporters, said the bill simply fills a statutory gap so the Department of Revenue (ADOR) has an explicit mechanism to keep digital assets in native form and to use a qualified custodian. He described "staking" and "airdrops" as potential incidental sources of return that could flow into a reserve but stressed the bill does not require converting an owner’s asset into a reserve: "All this says is that by virtue of treating these the same as stocks... we're gonna treat them all the same and provide a place for them to be held."

Senator Rogers also supported the measure, characterizing the bill as recognition that cryptocurrency is an asset class and applauding the work to provide statutory clarity.

What the bill does (as discussed on the floor): According to committee and floor explanations, the bill: - Specified procedures for selling forfeited digital assets and distributing proceeds when assets are forfeited by the Office of the Attorney General. - Clarified the state treasurer’s role and the definition of a "qualified custodian" for digital assets. - Allowed the Department of Revenue to hold unclaimed digital assets in native form until claimants come forward, subject to contractual arrangements with custodians, consistent with how the department holds other unclaimed securities.

Nut graf: Supporters said the bill closes a legal gap so ADOR can treat unclaimed crypto the way it treats unclaimed stocks; opponents said it risks creating a state-backed reserve that could distort market prices and that custodial expertise differs from traditional securities custody.

Process and implementation notes: The transcript records the vote tally (20–8–2) and instructs the secretary to transmit the bill to the House. Senators on both sides asked departmental staff and the treasurer to clarify vendor capacity and contract scope for custody.

Ending: The Senate transmitted HB2749 to the House after the roll-call. Further implementation will depend on how ADOR and the state treasurer interpret the qualified-custodian provisions and any procurement or contract amendments required to hold digital assets in native form.