Arizona Governor Katie Hobbs rejected a new bill that would allow the state to hold Bitcoin as part of its reserved funds.
This decision temporarily ended a plan that could have made Arizona the first U.S. state to keep Bitcoin in its financial reserves.
The governor noted that Bitcoin is an “untested” and “unsound” investment. Public funds should not be used for such risks, according to him.
Implications of the Bitcoin Bill Veto
The Digital Assets Strategic Reserve Bill, would have allowed the state to invest seized funds in Bitcoin.
It also proposed creating a Bitcoin crypto reserve managed by government officials.
The bill initially passed a final vote in the state House, with 31 votes in favor and 25 against. However, Governor Hobbs chose to veto it on Friday, May 2.
In her official statement, she emphasized that Arizona’s retirement system is one of the strongest in the country due to its “sound and informed” investment strategies.
She believes a Bitcoin reserve does not meet that standard. By rejecting the bill, Governor Hobbs clarified that the state is not yet ready to risk public funds on crypto assets.
If the bill had been signed into law, Arizona would have been the first state in the U.S. to create an official Bitcoin crypto reserve.
Supporters argued that digital assets could help future-proof the state’s finances, especially during economic uncertainty.
Critics warned that the Bitcoin price is too volatile, making it too risky for public funds.
Many fear that the veto move could also pause momentum on a related proposed bill called SB1373.
This bill would allow the state to invest up to 10% of Arizona’s rainy-day fund in Bitcoin and other digital assets.
Although the bill has not yet reached a final vote, many think it may now face delays or rejection.
States and Diverse Takes on Bitcoin Reserve
Arizona’s decision reflects a larger divide across the U.S. regarding the adoption of digital currencies as part of their financial reserves.
Some states want to explore digital assets to grow their investments, while others are choosing to wait, worried about the risks involved.
Notably, Arizona is not the only state where a Bitcoin crypto reserve bill has failed.
Similar proposals in Oklahoma, Montana, South Dakota, and Wyoming were also stopped or withdrawn.
On the other hand, other states are pushing ahead.
North Carolina recently approved a bill allowing the state treasurer to invest up to 5% of certain state funds in approved cryptocurrencies.
The bill is now under review in the state Senate.
What to Expect in the National Crypto Reserve Push in the U.S.
Arizona’s rejection of the Bitcoin bill may not slow down the broader national conversation.
At the federal level, digital assets are gaining support among Republican lawmakers, especially under President Donald Trump’s leadership.
President Trump signed an executive order in March to create a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.”
Supporters of this push believe it could help the U.S. maintain its position in global financial leadership.
Critics, however, worry about the risks of making digital assets part of the nation’s official reserves.
Many experts say more research and rules are needed before digital assets become part of public funds.
For now, the U.S. continues to debate whether Bitcoin belongs in government reserves or not.
