Arizona Governor Katie Hobbs signs House Bill 2749 into law, allowing the establishment of a Bitcoin and Digital Assets Reserve Fund

HB2749 updated Arizona's unclaimed property laws to account for the growing presence of digital assets, including crypto.

Governor Katie Hobbs has signed HB 2749, a bill that would create a crypto reserve in Arizona to hold unclaimed digital assets and pay the state taxes in the form of staking rewards.

The legislation updates Arizona's unclaimed property laws to account for the growing presence of digital assets. It also establishes a clear process for identifying and handling unclaimed virtual property, protects the value of digital assets held by the state, and creates a reserve fund that may be used for future appropriations with legislative approval.

"This law ensures Arizona doesn't leave value sitting on the table and puts us in a position to lead the country in how we secure, manage, and ultimately benefit from abandoned digital currency," said Chairman Jeff Weninger (R-Livingston).

"My House Commerce and Technology Committee built a structure that protects property rights, respects ownership, and gives the state the tools to account for a new category of value in the economy. This is exactly the kind of policy AZ should lead on—modern, precise, and built with an understanding of where technology and finance are heading."

Earlier this week, reports had emerged that the governor had vetoed SB 1025, a bill that would have allowed the state's retirement fund to be invested in virtual currencies such as Bitcoin, permitting the state to allocate up to 10% of its funds to crypto.

The Arizona Legislature recently approved the bill, which went to Governor Hobbs for her signature or veto. However, the governor vetoed SB 1025 on Wednesday to preserve the strength of the Arizona State Retirement System (ASRS).

In her veto message, Hobbs stated that Arizona's retirement system was strong because it "stuck to proven investment strategies." She believes exposing the state's retirement funds to untested investments like digital assets was inappropriate.

"While I appreciate the intent of SB 1025 to generate additional revenue for the state, and I am open to exploring new and creative ways to support the ASRS in the future, I believe that we should proceed with caution and prioritize the stability of our state's retirement funds over integrating crypto into state funds," Hobbs wrote.

The governor added that she had already taken steps to support the ASRS by signing legislation to fully fund the system and provide it with greater investment flexibility.

"I am committed to ensuring that the ASRS can continue to provide our retirees with the benefits and support they deserve," Hobbs said.

Earlier this year, the governor vetoed a bill that would have created a new state-level regulatory framework for crypto in response to the bipartisan federal effort to craft comprehensive legislation for the industry.

The bill, SB 1373, was one of several measures that would have established a licensing regime for crypto exchanges and created a new category of "virtual currency products" in state law. It also aimed to exempt certain crypto transactions from state securities laws.

The measure passed both the House and Senate with bipartisan support and had the backing of industry groups such as the Blockchain Association and the Chamber of Commerce.

However, Hobbs' office said the governor had concerns about the bill's impact on consumer protection and the state's ability to collect unclaimed property.

"The governor is focused on protecting consumers and ensuring that the state can collect the taxes and fees that are due to it," a spokesperson for Hobbs said.

"She is also committed to supporting responsible innovation in the crypto industry."

The governor's veto of SB 1373 came as no surprise, as she had previously expressed skepticism about crypto and its potential to disrupt the financial system.

In her State of the State address earlier this year, Hobbs warned that crypto was "a risky investment that could destabilize our economy."

"We need to be smart about this and make sure that we are protecting the people of Arizona," she said.

The governor's decision to veto SB 1373 is sure to disappoint crypto advocates, who had hoped to see the measure signed into law this year.

However, the bill's supporters may try to revive it next year, or a similar bill could be introduced in the upcoming legislative session.

Hobbs's vetoes brought the total number of bills she rejected in 2025 to 75, surpassing the 73 vetoes she issued in 2024. Her record remains the 143 bills she blocked in 2023, which were the most vetoed bills by any governor in Arizona's history.

Currently, SB 1373 is at Governor Hobbs's desk, awaiting either her signature or veto. However, Hobbs's track record suggests the bill may be headed for the same fate as SB1025.

This development marks a turning point in the integration of crypto into mainstream economic and political discourse. As the technology continues to evolve and its presence in society grows, expect to see more such bills and administrative actions that will shape the