Arizona's Crypto Reserve Bill Faces Governor's Veto Threat

Arizona’s Strategic Digital Assets Reserve Bill (SB 1373) has successfully navigated through the House Committee of the Whole and is now poised for a final vote before reaching Governor Katie Hobbs’ desk. The bill, which aims to establish a Digital Assets Strategic Reserve Fund, would be composed of digital assets seized through criminal proceedings and managed by the state treasurer. The treasurer would have the authority to invest up to 10% of the fund’s total money in digital assets annually and could loan the fund’s assets to enhance returns, provided it does not increase financial risks.

However, the bill’s journey to becoming law is not without obstacles. Governor Hobbs has recently pledged to veto all bills until the legislature passes disability funding legislation. Her commitment to this stance is evident, as she has already vetoed 15 bills this week alone. This could potentially delay or derail Arizona’s efforts to become a leader in state-level cryptocurrency adoption.

In addition to SB 1373, another crypto-related bill, the Arizona Strategic Bitcoin Reserve Act (SB 1025), is also advancing through the legislature. This bill specifically focuses on Bitcoin and would allow Arizona’s treasury and state retirement system to invest up to 10% of available funds into Bitcoin. SB 1025 passed the House Committee of the Whole on April 1 and is awaiting a full floor vote.

Several other states are also pursuing crypto reserve legislation. Utah passed Bitcoin legislation on March 7, but the key provision establishing a Bitcoin reserve was removed in the final reading, weakening the bill’s impact. The Texas Senate passed a Bitcoin reserve bill on March 6, and New Hampshire’s House has also passed similar legislation recently. While Arizona has made significant progress with its crypto reserve bills, the Texas bill is considered to have the best chance of becoming law due to encountering the fewest explicit roadblocks in its legislative journey.

As states compete to establish frameworks for digital asset reserves, Arizona’s progress with SB 1373 and SB 1025 positions it as a leader in this race. The full House vote on SB 1373 will determine whether Arizona continues its push to become a leader in state-level cryptocurrency adoption. The outcome could influence how other states approach similar legislation in the future.