Bitcoin Bill Rejected: Arizona Governor Halts Crypto Pension Strategy

Arizona Governor Katie Hobbs has officially vetoed a bill that would have allowed the state to create a Bitcoin reserve as part of its retirement fund investments.

Arizona Governor Katie Hobbs has officially vetoed a bill that would have allowed the state to invest part of its retirement fund in Bitcoin (BTC).

The bill, Senate Bill 1025, was passed by the state legislature earlier this year and would have authorized the Arizona State Retirement System to put up to 2.5% of its portfolio into cryptoassets. It was seen as a major win for the crypto community in the state.

However, Governor Hobbs, known for her stance against risky investments for critical state funds, ultimately decided to reject the bill. In a veto letter to Senate President Warren Petersen, dated May 2, 2025, Governor Hobbs stated:

“This bill would authorize the Arizona State Retirement System to invest in digital currency, commonly known as cryptocurrency, such as Bitcoin.

While I appreciate the legislature’s interest in exploring new investment opportunities for the state, I ultimately must veto this bill.

The Arizona State Retirement System is one of the strongest in the nation due to its conservative, informed investment approach. We must be cautious about adding new investment classes, especially those with the potential for significant volatility.

Despite the recent rise in the use and acceptance of Bitcoin and other cryptocurrencies, these remain high-risk assets that are not suitable for investment by the state retirement system. As these technologies continue to develop, we can reconsider this legislation in the future.”

Strong Point Of View From Governor Hobbs

Governor Hobbs's decision to veto the bill is likely to disappoint supporters of crypto who had hoped to see more states adopt Bitcoin and other digital currencies as part of their investment strategies.

It is also a setback for those who are interested in seeing new technologies adopted by government bodies.

However, Governor Hobbs's stance is shared by many who believe that public pensions should be focused on security and stability rather than on high-risk assets, no matter how promising they may appear. They are also concerned about the lack of regulation in the crypto industry.

The governor's decision comes at a time when institutional interest in Bitcoin is rapidly increasing. Earlier this week, it was reported that asset management giant BlackRock (NYSE:BLK) had purchased a substantial stake in Bitcoin, adding to a recent wave of institutional investment in the cryptocurrency.

According to a report by Glassnode, institutions have now accumulated a record amount of Bitcoin, with on-exchange supply at its lowest level since 2012.

This move by Arizona could have ripple effects across other states considering similar Bitcoin-based financial instruments.

While interest from large institutions like BlackRock and Fidelity is escalating rapidly – impending a new bull market in BTC, according to Ben Armstrong – state governments like Arizona appear to be proceeding with more caution.