Arizona Governor Katie Hobbs Vetoes Bill That Would Have Allowed the State to Hold Bitcoin as Part of Its Official Reserves

Arizona Governor Katie Hobbs has vetoed a bill that would have allowed the state to hold Bitcoin as part of its official reserves, effectively ending efforts to make Arizona the first US state to adopt such a policy.

Arizona Governor Katie Hobbs has vetoed a bill that would have allowed the state to hold Bitcoin as part of its official reserves.

The Digital Assets Strategic Reserve bill (HB 1025), which would have also permitted Arizona to invest seized funds into Bitcoin (BTC) and create a reserve managed by state officials, was formally struck down on Friday, according to an update on the Arizona State Legislature’s website.

“Today, I vetoed Senate Bill 1025. The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments,” Hobbs’s statement, addressed to President of the Arizona Senate Warren Petersen, reads.

“Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”

On April 28, the bill passed a final vote in the state House when 31 members of the Arizona House voted in favor of the bill, with 25 opposing.

The legislation was also approved by the state Senate on March 9, with a vote of 17 to 13.

During the session, the bill was amended to include an adjustment to the state’s disability funding formula, which Hobbs said was a condition for her support. However, she also stated that she would veto any legislation not tied to a bipartisan agreement on disability funding.

Another Bitcoin bill awaits final vote

A companion bill, SB1373, which would authorize the state treasurer to allocate up to 10% of Arizona’s rainy-day fund into digital assets like Bitcoin, has yet to reach a final vote. The bill is still pending in the state House after passing the Senate on February 15.

The state's efforts to create Bitcoin reserves come amid a push from US President Donald Trump and Republican lawmakers to do the same in the federal government.

Trump signed an executive order in March with a proposal for a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.”

The president’s administration is also planning to create a new task force to oversee the development of a US-issued digital dollar.

At the federal level, a bill that would regulate Bitcoin and cryptocurrencies is currently being drafted by the House Financial Services Committee. The bill, which is expected to be named the "Lummis-Gillibrand" bill after the two senators who co-authored a similar bill in the Senate last year, aims to create a comprehensive regulatory framework for digital assets.