Governor Hobbs 'Vetoes' Arizona's 'First' Bitcoin Reserve Bill

- Arizona Governor Vetoes Bitcoin Bill - Governor's Statement on the Rejection of Digital Asset Bill [Unblock Media] Arizona Governor Katie Hobbs exercised her veto power against the bill (SB 1025) that would have allowed the state government to hold Bitcoin as part of its official reserve assets. This halted Arizona's plan to become the first state in the United States to implement such a policy. According to the Arizona State Legislature website, the bill was officially discarded on Friday. The rejected bill, known as the 'Digital Assets Strategy Reserve Fund' (SB 1025), included measures for the state government to directly invest in Bitcoin using seized funds, creating a reserve managed by public officials. This was significant as it was the first attempt by a state government to recognize and invest in Bitcoin as an official asset. This event holds considerable importance in the legal and regulatory aspects of cryptocurrencies, particularly Bitcoin, and it has been interpreted as a signal that the inclusion of digital assets in public finance could elevate their status within the existing financial system. Governor Hobbs emphasized the principle of stable operation for state pension funds as the reason behind her veto decision. In a statement sent to Senate President Warren Petersen, Governor Hobbs stated, "Today, I have vetoed Senate Bill 1025. The Arizona State Retirement System is one of the strongest in the country because it makes sound and informed investments." This clearly indicates her assessment that direct public funding into Bitcoin, known for its volatility, does not meet the stability criteria of 'sound and informed investments.' Additionally, Governor Hobbs had previously stated her intention to veto any bill not based on bipartisan agreement, unless it pertained to disability funds, making this decision consistent with her existing stance. This suggests that any similar bills in the future will require bipartisan cooperation and support. reporter Eleanor Terrett (@EleanorTerrett) noted that two more cryptocurrency-related bills are still on Governor Hobbs' desk. One of these allows the state treasurer to invest in Bitcoin ($BTC) or related Exchange-Traded Funds (ETFs), adopting a similar approach to the vetoed SB 1025. third bill, which draws more attention, was introduced by Representative Jeff Weninger (HB 2693). This bill would allow the state government to take custody of unclaimed cryptocurrencies (e.g., Bitcoin, Ethereum) held by third-party exchanges like Coinbase in their original form instead of liquidating them as current laws require. Representative Weninger explained that if this bill passes, the state could create new reserve funds through profits from staking or airdrops rather than direct investments, thus preserving potential value appreciation while reducing the risks of direct investment. In an interview with reporter Terrett, Representative Weninger expressed hopeful optimism that despite the veto of the first bill (SB 1025), Governor Hobbs would sign the third bill (HB 2693). While Governor Hobbs' veto decision has temporarily halted Arizona's plan to establish a Bitcoin reserve fund, the effort to integrate digital assets into public finance is expected to continue. However, the approach may shift from direct investment to a focus on risk mitigation and asset management, as exemplified by HB 2693. Arizona's case is likely to influence discussions on related policies in other states as well.