Arizona Governor Vetoes Bill for Public Bitcoin Reserve

Arizona’s Democratic Governor, Katie Hobbs, has vetoed a bill for the third time that aimed to establish a public Bitcoin reserve from seized cryptocurrencies. The bill, HB 2324, was proposed to create a state Bitcoin reserve managed by the state, which would have allowed the creation of strategic reserves from cryptos confiscated during criminal investigations. This legislative initiative was adopted by 34 votes to 22 in the House of Representatives.

In her letter to House Speaker Steve Montenegro, Governor Hobbs cited operational concerns as the reason for her veto. She argued that the measure would disincentivize local law enforcement from working with the state on digital asset forfeiture. According to her, removing seized assets from local jurisdictions would harm inter-agency cooperation. This rejection is part of a series of repeated vetoes, as Hobbs had previously blocked two Senate bills in May that would authorize state treasurers and retirement systems to allocate up to 10% of their funds to Bitcoin. She also refused a proposal allowing public agencies to accept payments in cryptocurrencies for fines and taxes.

Governor Hobbs has consistently cited the volatility of cryptocurrency markets as her main argument against these measures. She believes that the current volatility of cryptocurrency markets is not a prudent choice for public funds. This position contrasts with the approach of other states like Texas and New Hampshire, which have already adopted strategic Bitcoin reserves.

Hobbs’ stance reflects the dilemmas faced by elected officials confronted with financial innovations. Her political caution is evident in her decision-making, but it also reveals apparent contradictions within her administration. For instance, in May, she signed bill HB 2749, allowing the state to retain unclaimed cryptos in their native form rather than converting them into cash. This decision suggests a nuanced approach rather than a systematic rejection of cryptocurrencies.

The irony of the situation lies in the fact that in June 2025, Arizona had already adopted a law creating a crypto fund fueled by seized criminal assets. This legislation established a “Bitcoin and Digital Assets Reserve Fund” with sophisticated allocation mechanisms: 50% of proceeds for the anti-racketeering fund, 25% for the general budget, and 25% for the crypto reserve. This previous legislation indicates a more favorable stance towards cryptocurrencies, contrasting with Hobbs’ recent vetoes.

The future outlook for cryptocurrency adoption in Arizona remains open. Analysts suggest that a future governor could have a different view, and in the long term, it doesn’t change the state’s prospects to accept crypto, or be seen as crypto-friendly. This analysis reminds us that political positions on cryptocurrencies evolve quickly, especially in a changing electoral context. By once again rejecting a pro-Bitcoin project, Arizona isolates itself from a growing wave of institutional adoption. However, nothing is fixed: in a region known for innovation, a single election can sometimes overturn an entire economic doctrine. Bitcoin has not said its last word in the Arizona desert.