Arizona Governor Vetoes Legislation That Would Have Let the State Invest in Cryptocurrency

Arizona’s governor has vetoed legislation that would have let the state invest in cryptocurrency.

The governor of Arizona has vetoed state legislation that would have allowed the state to invest in cryptocurrency.

“The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments,” Gov. Katie Hobbs said Friday in a letter to state Sen. Warren Petersen, president of the state Senate. “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”

Lawmakers in the state last week approved legislation that would have established a bitcoin reserve, enabling the state to invest as much as 10% of its public funds in digital assets. The legislation also would have permitted state employees to receive wages in bitcoin if they chose to do so.

The legislation, which passed the state House of Representatives last week in a 54-1 vote and the state Senate in a 27-2 vote, now heads back to the lawmakers. If the legislators can override Hobbs' veto, which would require a majority vote in both the House and Senate, the bill will go into effect 90 days after the session sine die.

Republican state Sen. Wendy Rogers told NBC News last week that it was in Hobbs' best interest to sign the legislation, which would have created the first state-level bitcoin reserve in the country.

“Crypto and bitcoin have a huge following nationwide and in Arizona. They are wildly popular with the youth and independents,” Rogers said, adding, “I certainly hope she signs it, because she can take credit and it will make her look good.”

She continued to express her disappointment with Hobbs on X following the governor’s decision on Friday, writing: “Politicians don’t understand that Bitcoin doesn’તી need Arizona. Arizona needs Bitcoin.”

The efforts by state lawmakers to establish an Arizona bitcoin reserve come as former President Donald Trump said in December that he was a “fan” of bitcoin and planned to create a national-level bitcoin reserve during his presidency. And as PYMNTS wrote last week, it’s also a sign of the growing mainstream adoption of cryptocurrencies.

“Observers believe it is becoming increasingly held, across Wall Street and beyond, that digital assets may no longer be confined to speculative circles. As bitcoin ETFs become a growing component of diversified portfolios and regulatory frameworks begin to crystallize, the decentralization dream that once defined crypto appears to be giving way to a new era of structured integration.

“It’s no longer a novelty to see major investment firms exploring crypto, but this year has seen a turning point. Morgan Stanley is preparing to offer cryptocurrency trading to its vast E*Trade customer base as soon as next year, with the potential to introduce millions of retail investors to digital assets via a familiar platform.

“Meanwhile, Charles Schwab is preparing to offer spot crypto trading for bitcoin and ethereum within the year, with the goal of meeting increasing demand from traditional investors.

“These moves are not isolated,” the report added. “BlackRock, the world’s largest asset manager, is pushing blockchain technology deeper into conventional finance. The firm recently announced plans to register a new share class of its $150 billion money market fund on a blockchain, a step designed to enhance transparency and operational efficiency.”