Arizona (AZ): Bitcoin and virtual-currency law

Summary

Arizona is a "both ways" state:

• Rules and tax:
• The legislature has passed pro-bitcoin tax rules: an income-tax subtraction for airdrops and for gas fees.
• A 2017 law recognises blockchain signatures and smart contracts.
• A 2025 kiosk anti-fraud law exists.
• A 2025 law (HB2749) keeps abandoned digital assets in their native form and creates a "Bitcoin and Digital Assets Reserve Fund" for the staking rewards and airdrops they earn.
• Vetoes and dead bills:
• Governor Katie Hobbs (D) vetoed every bill in 2025 that would have put state or pension money into bitcoin, or let agencies take crypto payments: SB1025, SB1373, SB1024 and HB2324.
• All the 2026 follow-up bills (SB1042, SB1043, SB1649, SB1044, SB1045, SB1432, SCR1003, SCR1033, HB2232) died "held" in committee or in the House.

The money-transmission statute's definition of "monetary value" is broad ("a medium of exchange, whether or not redeemable in money"), but it does not name virtual currency. Arizona did not adopt the MTMA's virtual-currency title.

1. Money-transmitter licensing and virtual currency

• Statute: A.R.S. § 6-1201 et seq.:
• § 6-1201(14): "Monetary value" means "a medium of exchange, whether or not redeemable in money."
• § 6-1201(24): "Receiving money for transmission" means "receiving money or monetary value in the United States for transmission ..." (A.R.S. 6-1201, saved).
• Is virtual currency covered? The statute does not say. Kiosk operators are defined in § 6-1236 by reference to "virtual currency business activity" through a "money transmission kiosk". We could not retrieve DIFI's published position: difi.az.gov returned HTTP 403 to automated requests on 2026-10-09. (Unverified whether DIFI requires a money-transmitter licence for virtual-currency-only businesses.)
• 2026 bill to license kiosk operators: HB2232 ("DIFI; cryptocurrency kiosk operator; license") was held in committee and died (azleg API).
• Regulatory sandbox: A.R.S. § 41-5601 et seq. (2018), run by the Attorney General. It lets participants test "financial product[s] or service[s]" that would otherwise need a Title 6 licence (A.R.S. 41-5601).

2. Virtual-currency-specific statutes and guidance

3. Crypto ATM / kiosk law

HB2387 (2025), "cryptocurrency kiosk; license; fraud prevention", Laws 2025 ch. 171. Signed 2025-05-12 (azleg API; chaptered text). Codified at A.R.S. § 6-1236 (text):

• Disclosures: two separate warnings, in the customer's chosen language, must be accepted before a transaction. One is about scams; the other says transactions are irreversible.
• Receipt contents:
• Operator contact details.
• The transaction hash.
• Sender and recipient details, including the recipient's wallet.
• The exchange rate and the refund policy.
• "DAI fees charged". The statute defines DAI as "a decentralized stablecoin token that is designed to maintain a value of the United States dollar". This looks like a drafting oddity, since fees would normally be stated in dollars; see section 7.
• Fraud controls: blockchain analytics to block wallets known to be linked to fraud, a written anti-fraud policy, and compliance with federal know-your-customer and anti-money-laundering law.
• Limits: $2,000 per day for a new customer (a customer of fewer than 10 days); $10,500 per day for an existing customer.
• Live customer service 24 hours a day, 7 days a week.
• Refunds: a full refund, including fees, for a new customer fraudulently induced to transact. The customer must contact the operator and law enforcement or the Attorney General within 30 days, and give the operator a report from the agency.
• Enforcement: the Attorney General; a violation is consumer fraud under § 44-1522.
• Start date: everyone counted as a "new customer" for compliance purposes on 2025-09-26.
• Licensing: the title mentions a licence, but § 6-1236 contains no licensing requirement of its own. AARP's tracker lists Arizona with limits, refunds, receipts and live support, but not licensing (AARP data, updated 2026-09-14).
• Results: the Attorney General's office said 35 victims had received full refunds totalling $171,332 since 2025-09-26 (Cointelegraph, 2026-08-12; the AG release itself was not retrieved).

4. Tax treatment

• Arizona follows federal adjusted gross income, so bitcoin is taxed as property (gains and losses), with two state-specific subtractions: airdrops (§ 43-1022(29)) and gas fees (§ 43-1028).
• Arizona's flat personal income tax rate is 2.5% (stated in Cryptonews via Yahoo; not checked against the Department of Revenue).
• Failed 2026 tax bills:
• SB1044 and SCR1003 (property-tax exemption for virtual currency; SCR1003 would have gone to voters as a constitutional amendment).
• SB1045 (would bar local taxes and fees on blockchain node operators).
• All three were "Held in House" and died (azleg API).
• Claim to check: Cryptonews (republished by Yahoo) says Arizona "permits state agencies to accept cryptocurrency payments through approved service providers". We found no such statute, and the Governor vetoed SB1024 (2025), the bill that would have allowed it (see section 6). Treat the claim as unverified and probably wrong.

5. Notable enforcement

Arizona does not appear among the seven lead states in the 2026-10-08 Coinme multistate settlement (CSBS); However, Arizona is a participating state (Appendix A); its share of the $2.2M administrative penalty is $123,236.52 (Appendix B) Coinme consent order, App. A–B (completeness check, 2026-10-09).

6. Bills, 2025 and 2026

Statuses come from the Arizona Legislature's bill API (apps.azleg.gov/api/Bill), queried 2026-10-09. The 2026 regular session has ended, so every 2026 bill shown as "held" is dead.

Veto letters: SB1025, SB1373, SB1024, HB2324. These are scanned images; we read them visually and quoted them above.

Pending: none. The next regular session begins January 2027.

7. Contested and fringe claims

• "Arizona has a bitcoin reserve." Some crypto media present HB2749 as a state bitcoin reserve. It is not one in the usual sense. HB2749 only (a) keeps abandoned digital assets in kind and (b) routes their airdrops and staking rewards to a fund after three years. Bitcoin does not stake and rarely receives airdrops, so the fund may receive little or no bitcoin. The Governor herself said it lets the state "utilize cryptocurrency without placing general fund dollars at risk." The point about bitcoin not staking is our analysis, not an official statement.
• The "DAI fees" receipt line (§ 6-1236(C)(6)). The statute requires receipts to show "DAI fees charged". We found no explanation of why a specific stablecoin is named. Whether a kiosk that never uses DAI must show "$0 DAI" is an open question.
• Pro-bitcoin legislators versus the Governor. Sponsors (Sen. Wendy Rogers, Speaker Steve Montenegro, Rep. Jeff Weninger) frame reserve bills as an inflation hedge. The Governor frames them as gambling with public money. Both sides are quoted in NBC News (secondary source, not retrieved in full).
• Cryptonews's "tax-free" framing. The article "Arizona Eyes 'Tax-Free' Status" overstates what happened: the bills died, and Arizona still taxes bitcoin gains as income.

Saved sources (sources/states/az/)

See sources/states/az/INDEX.md.

Gaps

• DIFI's virtual-currency licensing position (site blocked, HTTP 403).
• The AG's own press release on the refunds (we cite Cointelegraph).
• Any 2024 Arizona laws on home bitcoin mining or "right to mine" were not checked (unverified whether any exist).
• ~~Whether Arizona joined the 2026 Coinme settlement.~~ Resolved: it did (consent order, Appendix A).