Arizona is moving swiftly to secure legal protections for Bitcoin miners and blockchain node operators. The Arizona State Senate approved House Bill (HB) 2342 on Thursday, advancing it to Governor Katie Hobbs for final review. According to a post on X by Bitcoin Laws, HB 2342 passed the Senate narrowly, with 17 votes in favor and 12 opposed, reflecting strong debate among legislators.
https://x.com/Bitcoin_Laws/status/1910471330878939454
If Governor Hobbs signs it into law, the legislation will substantially protect home-based blockchain and artificial intelligence computing from local government restrictions.
Protections Under HB 2342
Introduced by Representative Teresa Martinez (R) in January 2025, HB 2342 explicitly safeguards residential blockchain activities. The bill classifies computational power used for blockchain mining, node operations, AI computing, and high-performance scientific research as matters of “statewide concern.”
Consequently, it prevents cities and counties from imposing zoning or usage restrictions targeting these activities. The bill represents Arizona’s strategic initiative toward embracing blockchain technology and fostering innovation statewide. Arizona continues to position itself as a leading state in blockchain and cryptocurrency adoption. HB 2342 is part of broader legislative efforts, including recent proposals aimed at integrating digital assets into state reserves.
Arizona lawmakers previously introduced two significant bills: the Strategic Digital Assets Reserve Bill (SB 1373) and the Arizona Strategic Bitcoin Reserve Act (SB 1025). These bills propose allocating state funds for Bitcoin reserves, suggesting investments up to 10% of the treasury or retirement funds in digital assets, including seized cryptocurrencies.
Other States Competing on Crypto Legislation
Several states are closely watching Arizona’s legislative developments, with many introducing similar crypto-related bills. According to the Bitcoin Laws reserve bill tracker, approximately 26 states have proposed comparable Bitcoin reserve initiatives. Arizona, however, stands closest to enacting such comprehensive legislation.
Neighboring Texas recently approved its version, Senate Bill 21 (SB-21), positioning itself competitively in crypto adoption. Additionally, Oklahoma advanced House Bill 1203 (HB 1203) through its House, awaiting a Senate vote. While Arizona focuses on state-managed crypto reserves, Kentucky adopted a distinct legislative approach.
Kentucky Governor Andy Beshear signed House Bill 701 (HB 701), formally protecting crypto holders who self-custody their assets. The Kentucky law clarifies that mining and staking activities are not securities or forms of money transmission. This legislative distinction underscores differing strategies among states regarding crypto regulation.
Historical Context of Arizona’s Crypto Efforts
Arizona’s push toward crypto-friendly legislation dates back to 2022, when President Joe Biden issued an executive order addressing nationwide crypto regulation. At that time, Arizona lawmakers had already proposed to consider Bitcoin as legal tender. Senator Wendy Rogers notably introduced legislation to recognize Bitcoin as a legal currency within Arizona formally. While that measure did not pass, it set a clear precedent for ongoing legislative interest in cryptocurrency.
A significant aspect of HB 2342 is its broad definition of “computational power,” encompassing various advanced technologies. The bill explicitly includes blockchain mining and node operation but also extends to artificial intelligence, cloud computing, and scientific research activities conducted in residential settings. This broad definition emphasizes Arizona’s intent to foster technological innovation broadly, beyond just cryptocurrency.
Parallel developments are occurring in other states, with New Hampshire recently passing its own Bitcoin-related legislation. The New Hampshire House of Representatives narrowly approved Bill HB302, allowing the state treasury to invest in precious metals and digital assets, including Bitcoin. The bill, now advancing to the Senate, garnered a slim majority of 192 votes for and 179 against. New Hampshire’s initiative adds to the nationwide momentum behind digital asset reserves.
Impact on Local Governments
Arizona’s HB 2342 significantly impacts local governments by limiting their regulatory authority over home-based blockchain and computing activities. Previously, cities and counties could impose zoning and usage restrictions affecting these operations. The new legislation would centralize oversight at the state level, effectively nullifying local regulations on residential blockchain and AI computing. This shift underscores the state’s broader vision for uniform, innovation-friendly regulation.
Governor Katie Hobbs’ signature remains the final procedural step for HB 2342 to become law. The governor’s decision could influence Arizona’s overall blockchain and crypto legislative trajectory, given the narrow Senate approval margin. If enacted, HB 2342 will immediately protect home-based blockchain node operators and miners, strengthening Arizona’s position as a pioneer in blockchain regulatory frameworks.
Arizona’s legislative initiatives, including HB 2342 and proposed reserve bills, mark the state’s proactive stance in digital asset management. Neighboring states and national legislators closely monitor Arizona’s progress, which could set critical precedents for future U.S. cryptocurrency and blockchain regulations.