Gov. Katie Hobbs has vetoed Arizona’s most prominent Strategic Bitcoin Reserve bills

Gov. Katie Hobbs has vetoed the Strategic Bitcoin Reserve bill (SB1025) and 22 other pieces of legislation, bringing her total number of vetoes during her two years in office to 185.

The House passed two major bills last week that would create a bitcoin reserve fund and grant the state the authority to invest in crypto. Both bills passed largely along party lines, setting the stage for a showdown with the governor, who is known for her preference for handling state revenue in more traditional ways.

As speculated, Hobbs vetoed SB1025, which was part of her dismissal of 23 bills last week.

The bill’s primary sponsor, Sen. Wendy Rogers (R-7th District), described the governor’s rejection of the bill as “unfortunate” and said she will be filing it again next session.

“I will refile my bill next session,” Rogers said. “If she vetoes it again, I am sure Governor Andy Biggs will be happy to take credit for signing the bill for this already proven (16 years!) innovation that will protect our wealth.”

Her bill, titled “Public Monies; Investment; Virtual Currency,” was one of the 143 bills that the governor vetoed in 2023.

The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.

Sen. Rogers: ‘Politicians Don’t Understand That Bitcoin Doesn’t Need Arizona’

The bill passed the House 31-25 and the Senate 17-11. A two-thirds majority vote in both chambers is needed to override a gubernatorial veto. It is unlikely that enough votes could be mustered to do so.

The governor also has yet to decide on the Digital Assets Strategic Reserve Fund bill (SB1371), which passed the House 32-24 and the Senate 16-12 last week.

It passed the House on Thursday with an amendment by Rep. Kevin Smith (R-60th District) to remove the requirement that the treasurer must seek advice from the retirement system board on the purchase of virtual assets.

Many believe that the bill has a better chance of being approved by the governor because it does not require investment of retirement funds in bitcoin and other virtual assets.

SB 1373 will enable the storage of seized virtual assets and other such funds in “secure custody solutions or exchange-traded products” under the Treasurer’s oversight. It will also allow the state to invest and loan out no more than 10% of the Digital Asset Reserve Fund, provided that the financial risks are minimal.