Arizona lawmakers are considering a bill that would allow the state to hold certain digital assets in a formal reserve fund, with the Internet Computer Protocol named directly alongside Bitcoin and XRP.
Arizona Senate Bill 1649 proposes creating a Digital Assets Strategic Reserve Fund managed by the Arizona State Treasurer. Rather than forcing the sale of crypto assets seized or surrendered to the state, the bill would allow Arizona to hold them in reserve.
The fund could receive digital assets confiscated by the state, voluntarily surrendered holdings and digital property treated as abandoned under existing laws. The Treasurer would also be allowed to generate returns through staking, airdrops and limited lending, as long as those activities do not create extra financial risk for the state.
The legislation uses a screening framework called a cryptocurrency fair value score to decide which assets can qualify for inclusion. That framework looks at factors such as adoption, transaction activity, transaction value and broader network utility.
What makes the bill stand out for the Internet Computer community is that Internet Computer Protocol is named directly in the proposal rather than being grouped into a broader category of digital assets. Bitcoin and XRP are also listed directly, while other qualifying assets mentioned include stablecoins, NFTs, Dash, Ravencoin, Chia, eCash and Monero.
Being named in state legislation gives ICP a level of institutional visibility that relatively few blockchain projects receive. Policymakers are effectively placing it in the same conversation as some of the best known digital assets when discussing long term reserves and treasury management.
Supporters of the bill argue that digital assets should be treated as productive holdings rather than automatically liquidated. They point to the ability to earn staking rewards, lending returns and airdrops as a way for states to extract additional value from seized or abandoned holdings. Critics, however, argue that crypto remains volatile and may not be suitable for state reserve management, particularly when public funds are involved.
The bill also sets out strict custody requirements. Private keys would need to be stored in encrypted environments, transactions would require multi-party approval and assets could not be controlled through a smartphone. Those requirements mirror the cold storage and multi-signature standards already used by many institutional custodians.
For ICP supporters, the timing is notable because the network has also been gaining traction in payments. Recently, ICP and ckBTC became accepted payment methods across more than 137 SPAR supermarkets in Switzerland through a partnership involving DFX and OpenCryptoPay, giving the network another real-world use case beyond decentralised applications.
ckBTC is a Bitcoin-backed asset that runs natively on the Internet Computer Protocol network. Unlike wrapped Bitcoin on many other chains, ckBTC does not rely on bridges or third-party custodians. It is created and redeemed directly through chain-key cryptography, which allows ICP smart contracts to interact with Bitcoin natively.
The proposal has already passed through several stages in the Arizona legislature, including Senate approval, and is now moving through the House process. It still needs to clear a full House vote and receive the signature of Governor Katie Hobbs before it can become law. Previous crypto reserve proposals in Arizona have faced resistance from Hobbs because of concerns around volatility and fiscal risk, so there is still uncertainty around whether SB1649 will ultimately make it through.
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