Arizona Governor Vetoes Bill to Make Bitcoin Part of State Reserves

Arizona Governor Blocks Bitcoin Reserve Bill, Citing Risk to Public Funds

Arizona Governor Katie Hobbs has officially vetoed a bill that would have allowed the state to hold Bitcoin as part of its financial reserves, halting a historic push to make Arizona the first U.S. state to adopt such a policy.

Senate Bill 1025, known as the Digital Assets Strategic Reserve bill, proposed allowing the state to invest seized funds into Bitcoin and establish a reserve overseen by state officials. The bill passed a final vote in the Arizona House on April 28, with 31 members voting in favor and 25 opposing. Despite the legislative momentum, Governor Hobbs struck the proposal down on Friday, according to records on the Arizona State Legislature’s website.

In her veto letter addressed to Senate President Warren Petersen, Hobbs emphasized that Arizona’s retirement system has remained one of the strongest in the country due to prudent and informed investments.

“Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency,” Hobbs stated.

Governor Hobbs had previously indicated she would veto any bill not associated with a bipartisan agreement on disability funding. This political stance further diminished the bill's prospects despite support among some lawmakers.

Source: Governor Katie Hobbs

Meanwhile, a companion bill, SB1373, which proposes allowing the state treasurer to invest up to 10% of Arizona’s rainy-day fund into digital assets such as Bitcoin, is still awaiting a final vote.

Arizona's decision follows similar outcomes in other states. Recent efforts to pass cryptocurrency reserve bills have failed in Oklahoma, Montana, South Dakota, and Wyoming. However, North Carolina broke that trend when its House passed the Digital Assets Investment Act on April 30, which would permit up to 5% of certain state funds to be allocated to approved cryptocurrencies. That bill is now headed to the North Carolina Senate.

At the federal level, momentum for government-held Bitcoin reserves is also building. Former President Donald Trump signed an executive order in March proposing the creation of a Strategic Bitcoin Reserve and a Digital Asset Stockpile, signaling broader Republican interest in digital assets as part of national and state financial strategies.

As debates continue across the country, Arizona’s veto underscores the cautious approach many leaders are taking when it comes to integrating volatile and relatively untested digital assets into public financial systems.