- Arizona Governor Katie Hobbs vetoed a bill that would have allowed the state to hold Bitcoin in its reserves, citing risks to public funds.
- The veto ends Arizona’s attempt to become the first state to integrate Bitcoin into official government finances.
In a significant move that has shaken the cryptocurrency community, Arizona Governor Katie Hobbs has vetoed a bill that would have allowed the state to hold Bitcoin (BTC) as part of its official reserves. The decision effectively ends Arizona’s attempt to become the first U.S. state to implement such a bold policy.
The proposed legislation, known as the Digital Assets Strategic Reserve Act, aimed to enable Arizona to use seized funds for Bitcoin investment. However, despite passing a vote in the state House of Representatives on April 28, the bill was struck down by Governor Hobbs, who cited concerns over the risks associated with investing in virtual currencies.
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In her statement, Governor Hobbs emphasized the stability and strength of the Arizona State Retirement System, one of the best in the nation, and expressed her disapproval of testing unproven investments with public funds. “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency,” Hobbs wrote in her official veto message to Warren Petersen, President of the Arizona Senate.
The veto follows the failure of similar initiatives in other states, such as Oklahoma, where attempts to establish Bitcoin reserves have also faltered. Additionally, states like Montana, South Dakota, and Wyoming have seen stalled efforts to incorporate cryptocurrency into their financial strategies.
Despite this setback, Arizona’s push for digital assets isn’t entirely over. Senate Bill 1373, a companion bill allowing the state treasurer to allocate up to 10% of state funds to digital assets, is still under consideration but has yet to pass a final vote.
Arizona’s efforts come on the heels of broader national discussions on Bitcoin’s role in public finances, spurred by former President Donald Trump’s recent executive order to establish a “Strategic Bitcoin Reserve” at the federal level.
For now, Arizona will have to wait before possibly becoming a pioneer in state-level Bitcoin adoption, as Governor Hobbs’ veto sends a strong message about the risks of integrating digital currencies into government reserves.