Arizona Rejects Bitcoin Reserve Proposal, Marking a Key Decision in the State's Digital Asset Policy

Governor Katie Hobbs vetoed two major crypto bills, including one that would have allowed state reserve funds in Bitcoin.

Arizona has made a significant decision by rejecting a proposal to establish a Bitcoin reserve, marking a key development in the state’s digital asset policy. Governor Katie Hobbs vetoed two major crypto bills, including one that would have allowed state reserve funds to be invested in Bitcoin.

While she approved other crypto-related legislation, the vetoes drew mixed reactions from the community.

Arizona Governor Rejects Bill For Bitcoin Reserve

Governor Hobbs vetoed SB 1373, which proposed allocating up to 10% of reserve funds in Bitcoin, aiming to diversify state assets. The bill, which aimed to create a Bitcoin rainy-day fund, has been met with mixed reactions.

This vetoed proposal aimed to establish a Bitcoin reserve within Arizona’s rainy-day fund, aiming to strengthen state asset diversity. The bill, which had bipartisan support, sparked debate on financial innovation versus fiscal prudence.

"I am focused on ensuring that we can manage the state's finances effectively and efficiently and make sound investments that will benefit all Arizonans for generations to come. Given the significant market volatility and potential risks to public funds, I have decided to veto SB 1373," Governor Hobbs explained in her veto letter.

This veto stops Arizona from becoming the second U.S. state, after New Hampshire, to have an official Bitcoin reserve.

"I urge you to continue exploring ways to diversify the state's investments and strengthen our rainy-day fund," she added.

However, Governor alludes to previously signed legislation that enables limited digital asset use without impacting the general fund reserves.

"This administration is not averse to exploring new technologies and engaging in the emerging market of digital assets. To this end, I signed House Bill 2749, which will allow the state to hold unclaimed digital assets, such as cryptocurrency, in accordance with existing procedures for holding and distributing unclaimed property."

The administration feels that the state can explore digital assets without being pushed into establishing a full Bitcoin reserve.

"While I appreciate the intent of this bill and recognize the growing interest in cryptocurrency, I believe that it is best to proceed with a measured approach and continue to evaluate the landscape of digital assets."

SB 1024: No Bitcoin For Civil Payments

Another proposal that was vetoed was SB 1024, which would have allowed residents to make civil payments, such as taxes, using Bitcoin.

The bill aimed to integrate digital currencies into Arizona's financial systems and promote widespread adoption of a Bitcoin reserve concept. If passed, Arizona would have positioned itself as a frontrunner in crypto-enabled public payments.

However, Governor warmly explained her decision to reject the proposal, signaling that the state is not yet ready to include cryptocurrencies in its payment systems.

"I want to be clear: this administration is open to exploring new technologies and engaging in the emerging market of digital assets. But we must proceed with a mind toward stability and with the best interest of the state in mind."

She claims that this level of financial integration requires further analysis and broader legislative support.

"While I appreciate the intent of this bill and recognize the growing interest in cryptocurrency, I believe that it is best to proceed with a measured approach and continue to evaluate the landscape of digital assets. For this reason, I have decided to veto SB 1024."

Lawmakers had promoted the bill to position Arizona at the forefront of crypto policy.

But the administration maintained a firm stance on preserving stability within government financial systems. The veto indicates a preference for regulatory readiness over rapid crypto integration or expansion of a Bitcoin reserve.

Arizona Signs Regulation But Blocks Adoption

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