Despite Tremendous Backing, Arizona Governor Katie Hobbs Rejected a Novel Proposal to Include Bitcoin in the Legally Binding Accounting of State Holdings.

The Senate Bill 1025, which was vetoed, had the potential to position Arizona as the first state in the United States to adopt this strategy.

Arizona Governor Katie Hobbs vetoed a bill that would have included Bitcoin in the state’s legally binding accounting of its holdings, despite strong support for the proposal.

Senate Bill 1025, which had the potential to position Arizona as the first state in the U.S. to adopt this strategy, was put to a vote after the Arizona State Legislature announced an update on May 3, 2025.

The proposed legislation, known as the Digital Assets Strategic Reserve, would have allowed the state to invest confiscated funds in Bitcoin, thereby establishing a reserve that would be supervised by state officials. However, Governor Hobbs said her decision was part of broader legislative priorities. But she stressed that she would not sign any bills that were not consistent with a bipartisan plan on disability funding.

“I have rejected Senate Bill 1025 today,” Hobbs declared, signaling her focus on other state issues.

Legislative Journey of the Bitcoin Reserve Bills

The early part of the year is when the path to the veto started. On April 28, 2025, SB 1025 passed out of the Arizona House and went to Governor Hobbs’ desk for approval.

The House also passed SB 1373 that same day, 37–19. According to the second law, the comptroller of Arizona may have invested as much as 10% of the state’s emergency fund in cryptocurrency, such as Bitcoin.

However, SB 1373 faced delays. The Senate caucuses met to review the amendments from the House by May 1, 2025. In line with the Republican caucus, they would accept the changes, but the Democratic caucus had not decided yet. The bill was left in limbo, but was awaiting further action before it could be sent to the governor for a signature.

The legislative process showed how difficult it is to pass policies related to cryptocurrency. Both bills received a lot of support in the House, but the Senate approval of SB 1373 would also be uncertain as would the governor’s position, which would depend on unrelated funding issues.

Impact of the Veto on Arizona’s Crypto Ambitions

Governor Hobbs’ veto of SB 1025 essentially stopped Arizona’s dream of becoming an early adopter of Bitcoin at the state level. The state had been poised to set a precedent others would follow. The proposal to keep Bitcoin in reserves was part of a wider trend, as other states such as North Carolina have also considered such moves. On April 30, 2025, for example, North Carolina’s House passed the Digital Assets Investment Act which would allow up to 5% of certain funds to be invested in approved cryptocurrencies

This veto also reflects broader tensions in state governance. She had previously warned she would reject legislation not related to her priority of obtaining bipartisan support for disability funding. Such a position illustrates the intricacies of cryptocurrency policy progress amidst other legislative priorities.

Meanwhile, SB 1373’s fate remains uncertain. The bill could still go to the governor’s desk if the Senate Democrats agree with the House amendments. Nonetheless, the likelihood of approval seems low considering Hobbs’ recent veto of SB 1025. The situation reflects issues faced by other states, such as Utah, which has scaled back its Bitcoin reserve proposals.

The veto is a major blow to cryptocurrency advocates in Arizona. The governor’s decision has, however, put a hold on those efforts for now, although the state’s lawmakers were willing to explore digital assets.