The Arizona State Senate is considering a proposal to encourage the inclusion of Bitcoin exchange-traded funds (ETFs) in two of the state’s retirement portfolios.

The resolution is currently being reviewed by the House for a second time after it passed the Senate’s Third Reading in a 16-13 vote on Feb. 22, records show.

If passed, the proposal would encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to consider adding exposure to Bitcoin ETFs in their respective portfolios, according to state records.

The Bitcoin retirement resolutions was first introduced and read by the Senate on Jan. 30, 2024.

It encourages the ASRS and PSPRS would need to monitor developments in the Bitcoin ETF industry and consider the “implications” of allocating Bitcoin ETFs to their retirement portfolios, which would involve consulting with firms that offer a Securities and Exchange Commission-approved Bitcoin ETF.

A “comprehensive report” would then need to be sent to Arizona’s State Treasurer, President of the Senate, and Speaker of the House of Representatives, outlining the feasibility, risks and potential benefits of adding Bitcoin ETF exposure and the safety precautions they would take.

Other digital asset ETFs would be considered too, the document states.

Satoshi Action Fund’s CEO Dennis Porter said the move can be seen as a strategic effort to enhance portfolio diversification and reduce investment risk, adding even adding a small amount of Bitcoin ETF exposure could “DRAMATICALLY” de-risk an asset portfolio.

“By considering #Bitcoin ETFs, Arizona is looking to leverage the inherent value and potential stability offered by #Bitcoin, akin to traditional safe-haven investments like gold,” he explained in a March. 6 X post.

Earlier this year, Chicago Board Options Exchange’s president John Palmer anticipated that a spot Bitcoin ETF approval would “pave the way” for pension and retirement investment account funds to invest in Bitcoin via the ETFs.