Arizona Senate Passes Bitcoin Mining Rights Bill, 17-12

The Arizona Senate has officially passed the Bitcoin Mining Rights Bill, HB 2342, with a vote of 17 to 12. The bill, which prohibits cities, towns, and counties from banning or restricting individuals from using computational power or running blockchain nodes in their own homes, has been sent to Governor Katie Hobbs for signature. The legislation, introduced in January by state Rep. Teresa Martinez, defines computational power to include mining and running nodes, and also targets artificial intelligence workloads, cloud computing, and scientific research.

Governor Katie Hobbs previously vetoed a legislation that limited municipalities from taxing cryptocurrency mining operations. Despite this, the state has been moving closer to establishing a state-level crypto reserve. Two key bills, SB1373 and SB1025, cleared the House Rules Committee last month and are now headed for a full floor vote. If enacted, Arizona could use seized crypto and invest up to 10% of the state treasury or retirement funds into Bitcoin. The legislation also permits lending the assets to generate returns, as long as financial risks are not heightened.

However, the bills may face a significant challenge at the executive level. Governor Katie Hobbs, a Democrat, has vetoed 22% of bills in 2024 so far, which means that roughly one in five of the bills that made it through both chambers reached her desk and were ultimately vetoed. This could pose a hurdle for the Bitcoin Mining Rights Bill and the crypto reserve bills, as the governor's stance on cryptocurrency-related legislation remains uncertain.