Arizona Governor Katie Hobbs Vetoes a Bill That Would Have Allowed the State to Hold Bitcoin

input: Arizona Governor Katie Hobbs has vetoed a bill that would have allowed Arizona to hold Bitcoin as part of its official reserve assets. This move is not unexpected

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

According to a letter seen by Cryptopolitan, the Democrat governor said that the state’s retirement funds are not suitable for investing in untested investments such as cryptocurrencies.

Her statement reads:

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

With the move, Hobbs has undone months of work and lobbying efforts by those who wanted the state to establish a Strategic Bitcoin Reserve (SBR) to hedge against inflation. The proposed legislation passed the final vote in the Arizona House of Representatives on April 28, making it the first SBR bill to scale through the legislative process.

However, many expected Hobbs to veto the bill, particularly after she said in an X post in April that she would veto any bill not connected to the bipartisan agreement on disability funding.

Interestingly, Hobbs has now vetoed two crypto-related bills while approving one. The bill she signed, House Bill (HB) 2342, protects Bitcoin mining from regulatory discrimination, while the other bill she vetoed, HB2906, would have allowed crypto companies to be included in the regulatory sandbox.

Generally, a veto such as this may not mark the end of a bill if there is overwhelming legislative support. This is because the legislature can override the veto with a two-thirds majority vote to pass the bill into law.

Nevertheless, that is unlikely to happen with Senate Bill 1025, given that it passed the legislature with a simple majority. In the House, 31 members supported the bill, while 25 were against it.

Arizona legislature already working on second bill

Interestingly, the Arizona legislature is also deliberating on another bill that allows the state treasurer to invest 10% of the state funds into Bitcoin and other digital assets. Senate Bill 1373 is currently in the Senate after the House made amendments to the original bill.

According to Bitcoin Laws, an account tracking Bitcoin-related legislation, the Republican caucus of the Senate has already recommended concurrence, but the Democrats have yet to decide. The Senate would need to vote to approve the change before it can be sent to Governor Hobbs for assent.

Beyond this, Arizona House member Jeff Weninger said that HB2749 had also been passed by the legislature and is now on the Governor’s desk. The HB2749 is a proposed bill that protects unclaimed crypto assets by preventing forced sales.

It also allows the state to stake unclaimed crypto assets, and according to Weninger, it passed the House unanimously and the Senate with a two-thirds majority.

Nevertheless, Hobbs’ recent statement on SB1025 suggests that the new bills could face challenges to their signing if the governor’s demands are not met. However, it is difficult to predict which decision the governor will take, given that she has already signed one Bitcoin-related bill recently.

More states champion Strategic Bitcoin Reserve legislation

While the governor appears to be the major obstacle to Arizona having a Bitcoin reserve law, other states are making significant strides in the efforts to legally make Bitcoin an investment asset for the governor.

In North Carolina, HB92 has already passed the Senate’s first reading and has been referred to the Senate Committee on Rules and Operations of the Senate. The North Carolina House has already passed the proposed law, and it is the fifth state where at least one chamber of the legislature will pass the SBR bill.

New Hampshire has also made significant strides in its SBR and digital assets stockpile laws. The Senate has already passed the bill that will allow the state treasurer to invest in crypto, and Majority Leader Rep Keith Ammon believes that the state could be the first to pass the bill into law.