Arizona Governor Katie Hobbs Vetoes Senate Bill 1025, Which Would Have Authorized the State to Create a Bitcoin Reserve

The decision, made on May 2, marks the first time a sitting US governor has rejected a state-backed strategic Bitcoin reserve (SBR) initiative

Arizona Governor Katie Hobbs has vetoed Senate Bill 1025, which would have authorized the state to create a Bitcoin reserve.

The decision, made on May 2, marks the first time a sitting US governor has rejected a state-backed strategic Bitcoin reserve (SBR) initiative, despite growing interest in such measures across several states.

“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,” Governor Hobbs said in her veto letter to Senate President Warren Petersen.

Her stance reflects the broader skepticism within the Democratic Party toward crypto integration in state financial systems. It also follows shortly after Arizona’s legislature made history as the first in the US to pass an SBR bill in both chambers, garnering bipartisan support.

"This legislation is an attempt to use the retirement funds of Arizonans to try new and untested investments, which is not the priority of the Arizona State Retirement System. It is the priority of the majority party in the state legislature," a spokesperson for the governor further told Blockworks.

SB 1025 was one of two digital asset-related proposals forwarded to Hobbs’s desk this session. The second, Senate Bill 1373, would give Arizona the authority to retain cryptocurrencies obtained through legal seizures. It would also empower the state treasurer to lend these assets to generate additional income.

The status of this bill remains unclear in the wake of Hobbs’s opposition to SB 1025.

"Governor Hobbs is focused on making smart investments in Arizona's future, and she is disappointed that the legislature included an attempt to use the retirement funds of Arizonans to try new and untested investments," the spokesperson added.

"The governor will continue to work with the legislature on legislation that is focused on the best interests of all Arizonans."

With this veto, Arizona joins a group of states—including Oklahoma, Montana, North Dakota, and Wyoming—where efforts to formalize Bitcoin reserves have stalled or failed.

However, momentum continues elsewhere. New Hampshire is nearing a potential breakthrough, with its SBR proposal advancing past committee review and now awaiting a full vote in the second legislative chamber. If approved, it will proceed to the governor for final consideration.

At the national level, Senator Cynthia Lummis has welcomed recent support from President Donald Trump for her plan to establish a federal Bitcoin reserve.

“The BITCOIN Act is the only solution to our nation’s $36T debt. I’m grateful for a forward-thinking president who not only recognizes this, but acts on it,” Lummis stated.

Lummis is pushing the BITCOIN Act bill, which will allow the US to acquire up to 1 million BTC over five years. The lawmaker claims such a move would help stabilize US fiscal policy and enhance the nation’s role in global financial innovation.

"This broad support for the BITCOIN Act is a testament to the urgency of our economic crisis and the bipartisan interest in bold solutions," Lummis added. "We need to pivot from the failed Keynesian policies of the past 80 years and adopt a new framework for economic stability and prosperity."

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