TLDR
- Arizona Governor Katie Hobbs has vetoed two major crypto bills, including one proposing a Bitcoin reserve.
- SB 1373 would have allowed up to 10 percent of Arizona’s reserve funds to be held in Bitcoin.
- The Governor cited cryptocurrency market volatility as the reason for rejecting the Bitcoin reserve bill.
- Arizona approved House Bill 2749, which allows holding unclaimed digital assets like Bitcoin without risking general funds.
- Another vetoed bill, SB 1024, aimed to let citizens make civil payments and taxes using cryptocurrencies.
Arizona has rejected a proposal to establish a Bitcoin reserve, marking a significant 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. While she approved other crypto-related legislation, the vetoes drew mixed reactions from the community.
Arizona Governor Vetoes Bitcoin Reserve Bill
Arizona Governor Katie Hobbs has vetoed SB 1373, which proposed allocating up to 10% of reserve funds in Bitcoin. The bill aimed to establish a Bitcoin reserve within Arizona’s rainy-day fund to strengthen state asset diversity. However, the Governor cited market volatility and potential risks to public funds in her veto explanation.
This veto halted efforts to make Arizona the second U.S. state, after New Hampshire, with an official Bitcoin reserve. Supporters of the bill argued it would promote innovation and financial independence through cryptocurrency diversification. Despite this, the state leadership chose a more conservative approach to fiscal management.
Governor Hobbs pointed to a previously signed bill enabling limited digital asset use without impacting general fund reserves. Arizona House Bill 2749, approved on May 7, allows the state to hold unclaimed digital assets, including Bitcoin. Therefore, the administration believes the state can explore digital assets without establishing a full Bitcoin reserve.
SB 1024: Bitcoin Use in Civil Payments Blocked
SB 1024, another vetoed proposal, would have allowed residents to make civil payments, including taxes, using Bitcoin. The bill sought 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.
Governor Hobbs rejected the proposal, signaling the state’s unreadiness to include cryptocurrencies in payment systems. The administration emphasized that this level of financial integration requires further analysis and broader legislative support. Despite its rejection, the bill sparked discussions on modernizing state financial operations.
Lawmakers had promoted the bill to position Arizona at the forefront of crypto policy. However, 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
Crypto advocates reacted strongly to the vetoes, expressing disappointment over Arizona‘s halted BTC reserve plans. Some critics argued that the decisions reflect missed opportunities for financial innovation and competitive advancement. Others emphasized the state’s focus on regulatory control over rapid adoption.
Senator Wendy Rogers and prominent crypto figures criticized the vetoes, stressing Arizona’s need to adapt to emerging financial trends. Public reactions online included concerns about leadership misunderstanding Bitcoin’s role in state-level economics. The criticism followed similar responses to last year’s veto of a Bitcoin legal tender bill.
Meanwhile, Governor Hobbs signed House Bill 2387 to regulate Bitcoin ATMs, introducing limits to address fraud and illicit use. While Arizona has moved forward with oversight measures, the decision to block the BTC reserve and related bills shows its measured stance.
