Arizona Governor Katie Hobbs Vetoes a Bill That Would Have Authorized the State to Invest in Bitcoin

input: Arizona Governor Katie Hobbs has vetoed a bill that would have authorized the state to invest a portion of its funds in Bitcoin, ceasing an effort to create a digital asset reserve within the state treasury.

Arizona Governor Katie Hobbs has vetoed a bill that would have authorized the state to invest a portion of its funds in Bitcoin, ceasing an effort to create a digital asset reserve within the state treasury.

The move unexpectedly ends a Republican-led initiative to make Arizona the first U.S. state to allocate public funds to cryptocurrency.

Senate Bill 1025, passed by the Republican-majority state Senate and House of Representatives on April 26, proposed allowing Arizona’s state treasurer and public retirement systems to invest up to 10% of their assets in virtual currencies such as Bitcoin. The legislation outlined the use of seized assets to back the proposed investments and create a digital asset reserve managed by the state.

The bill passed the House with a narrow 31–25 vote and had the support of two Republican lawmakers who co-sponsored the measure. However, the legislation did not progress beyond the governor’s desk. Governor Hobbs issued a veto soon after the bill’s arrival, effectively ending the legislative push.

The Governor of Arizona just vetoed a bill that would have seen the state invest in bitcoin.

Imagine the ignorance of a politician to believe they can make investment decisions.

If she can’t outperform bitcoin, she must buy it.https://t.co/L877b973jx pic.twitter.com/VoTAhrcvCM

— The Bitcoin Standard (@BitcoinStandard) May 13, 2023

Governor Cites Risk to Retirement Funds

In her formal veto letter, Governor Hobbs emphasized concerns about applying public funds to what she described as “untested” assets. She defended the performance and strategy of the Arizona State Retirement System, stating that its strength lies in its commitment to informed investment decisions.

According to Hobbs, virtual currencies such as Bitcoin do not meet the investment standards necessary for safeguarding retirement funds. She wrote that the state’s retirement system “is one of the strongest in the nation because it makes sound and informed investments,” adding that Arizonans’ retirement savings should not be exposed to the volatility of digital assets.

According to the governor’s office, the administration’s priority is to ensure that any new legislation is passed and that a bipartisan funding plan is put in place.

The governor’s veto comes as no surprise, given her previous statement that she would not approve any new legislation until a bipartisan funding plan is passed, particularly one that protects health services for Arizonans with disabilities.

The statement from the governor’s office also mentions that the administration is focused on advancing legislation that supports small businesses and creates jobs in Arizona.

The decision has sparked some reactions on social media. Following the news of the veto, Bitcoin Magazine CEO David Bailey expressed his frustration with the outcome.

This is the DEEP STATE at work, brazenly trying to steal from the people of Arizona! Governor Hobbs's veto of SB1025 is a direct theft from the Arizona State Retirement System and a denial of the will of the elected officials in the state legislature. Shame on her! https://t.co/sG873Vqm70

— David Bailey (@TheChainLink) May 13, 2023

Earlier this year, Iowa, Missouri, and Texas Legislatures were also considering similar Bitcoin reserve bills. However, no comparable proposals have been signed into law by any state since early May 2025.

The rejection of the Arizona bill underscores the ongoing debate around the role of cryptocurrencies in public finance. If passed, Arizona would have become the first state to formally invest in Bitcoin as part of its reserve strategy, possibly outpacing even the federal government in digital asset adoption.