Arizona Governor Vetoes Bill Allowing State Bitcoin Investment

Arizona Governor Katie Hobbs has vetoed a bill that would have allowed the state to invest in Bitcoin and other digital assets. The legislation, known as Senate Bill 1025 or the “Arizona Strategic Bitcoin Reserve Act,” was co-sponsored by Wendy Rogers and Jeff Weninger. It proposed that the state could invest up to 10% of its treasury and pension assets in digital assets like Bitcoin. Had it become law, Arizona would have been the first state in the nation to adopt such a policy.

In her veto message, Governor Hobbs expressed concern over the volatility and untested nature of digital assets. She stated that Arizona's retirement system is strong because it adheres to proven investment strategies and that it would be inappropriate to expose the state’s retirement funds to untested investments like digital assets. This decision comes as part of a broader trend where similar initiatives in other states, such as Oklahoma, Montana, South Dakota, and Wyoming, have also failed to advance.

While the veto is a setback for crypto advocates, it aligns with Governor Hobbs' earlier stance on blocking legislation over unresolved disability funding. On the same day, she issued a string of other rejections, bringing her total vetoes for 2025 to 75, surpassing the 73 vetoes she issued during all of 2024. Her record remains the 143 bills she blocked in 2023, the most by any governor in Arizona history.

Despite the veto, Arizona lawmakers had previously approved two bills related to digital assets. SB1025 and SB1373, the latter proposing the creation of a Digital Assets Strategic Reserve Fund, are now awaiting the Governor’s decision. However, given Hobbs' track record, it is likely that SB1373 may face a similar fate.

This decision underscores the ongoing debate surrounding the role of cryptocurrencies in government financial strategies. While some advocates see digital assets as a potential hedge against inflation and a means to diversify investment portfolios, critics point to their volatility and lack of regulatory oversight as significant risks. Governor Hobbs' veto highlights the cautious approach many governments are taking towards integrating cryptocurrencies into their financial systems, prioritizing stability and proven investment strategies over the potential benefits of digital assets.