Governor Katie Hobbs Vetoes Bill That Would Have Let Arizona Invest Retirement Funds in Bitcoin

The Senate Bill 1025 proposed adding virtual currency to the portfolio of the Arizona State Retirement System.

Governor Katie Hobbs has vetoed a bill that would have allowed Arizona to invest retirement funds in crypto assets like Bitcoin.

Why It Matters: The Senate Bill 1025 proposed adding virtual currency to the portfolio of the Arizona State Retirement System.

However, Hobbs rejected the policy earlier today, saying it puts “untested assets” into a program known for stable results.

In a letter to Senate President Warren Petersen, Hobbs said the state’s retirement system is one of the strongest in the country. She argued that crypto remains too risky and that retirement funds should not be used to test new markets.

"While I appreciate the willingness of the legislature to consider new ideas, I want to highlight the importance of approaching this topic with caution and prioritizing the stability of our state's retirement investments," she stated.

The governor's decision now blocks any crypto exposure in the state's pension accounts.

Senate Bill 1025 was one of the first efforts in the U.S. to bring digital assets into public pension programs.

Lawmakers framed the bill as a forward-looking step, and they believed crypto could help diversify investment returns.

But Governor Hobbs disagreed, saying the fund's current strength comes from careful planning and tested investments.

"We should not be testing new markets with retirement funds," she added.

The bill's supporters had been arguing that adding Bitcoin and other digital assets could future-proof public funds.

However, the opponents opine that the bill lacked proper risk models and oversight. The veto gives momentum to the cautious approach adopted by several state governments to manage public funds.

This bill had earlier sparked interest as it could have led Arizona in the public adoption of crypto assets.

The pending bill, SB1373, would allow the state to reserve up to 10% of Arizona’s rainy-day funds in digital assets like Bitcoin. This bill is yet to reach a final vote.

Several other U.S. states like Oklahoma, Montana, South Dakota and Wyoming have also been pursuing similar efforts but to no avail yet.

The bill would have seen Arizona join a small group of U.S. states that have been considering investing public funds in digital assets.

Earlier this year, Wyoming lawmakers approved a measure to allow a portion of the state's mineral income to be invested in Bitcoin.

Meanwhile, lawmakers in Oklahoma passed a bill to enable the state to put up to 15% of idle treasury funds in digital assets.

Several other states are also contemplating similar proposals as they seek to diversify government revenue streams and potentially hedge against inflation.

The pending bill, SB1373, would allow the state to reserve up to 10% of Arizona’s rainy-day funds in digital assets like Bitcoin. This bill is yet to reach a final vote.

Several other U.S. states like Oklahoma, Montana, South Dakota and Wyoming have also been pursuing similar efforts but to no avail yet.

The bill's supporters had been arguing that adding Bitcoin and other digital assets could future-proof public funds.

However, the opponents opine that the bill lacked proper risk models and oversight. The veto gives momentum to the cautious approach adopted by several state governments to manage public funds.

This bill had earlier sparked interest as it could have led Arizona in the public adoption of crypto assets.

The pending bill, SB1373, would allow the state to reserve up to 10% of Arizona’s rainy-day funds in digital assets like Bitcoin. This bill is yet to reach a final vote.

Several other U.S. states like Oklahoma, Montana, South Dakota and Wyoming have also been pursuing similar efforts but to no avail yet.

The bill's supporters had been arguing that adding Bitcoin and other digital assets could future-proof public funds.

However, the opponents opine that the bill lacked proper risk models and oversight. The veto gives momentum to the cautious approach adopted by several state governments to manage public funds.

This bill had earlier sparked interest as it could have led Arizona in the public adoption of crypto assets.

The pending bill, SB1373, would allow the state to reserve up to 10% of Arizona’s rainy-day funds in digital assets like Bitcoin. This bill is yet to reach a final vote.

Several other U.S. states like Oklahoma, Montana, South Dakota and Wyoming have also been pursuing similar efforts but to no avail yet.

The bill would have seen Arizona join a small group of U.S. states that have been considering investing public funds in digital assets.

Earlier this year, Wyoming lawmakers approved a measure to allow a portion of the state's mineral income to be invested in Bitcoin.

Meanwhile, lawmakers in Oklahoma passed a bill to enable the state to put up to 15% of idle treasury funds in digital assets.

Several other states are also contemplating similar proposals as they seek to diversify government revenue streams and potentially