Lawmakers had approved the deal, but Governor Hobbs calls it too risky
Arizona Governor Katie Hobbs has vetoed legislation that would allow the state to invest in Bitcoin, putting an end to a proposal that would have established Arizona as a trailblazer in cryptocurrency policy in the state. Hobbs vetoed Senate Bill 1025, also known as the Digital Assets Strategic Reserve bill, on Friday. The state House voted 31-25 in favor of the bill but was unable to overcome the governor’s veto.
The bill proposed allowing state agencies to operate a reserve fund made up of Bitcoin bought using seized assets. Its proponents said it was one step forward towards placing state finances in the digital age and catching up with internet trends. However, Hobbs indicated she wasn’t convinced.
In a letter to Arizona Senate President Warren Petersen, Hobbs said the state retirement system is among the strongest in the country because of conservative investment practices. She warned against state money being used to invest in virtual currency as unnecessary risk. “Arizonans’ retirement dollars are not the place for the state to experiment with untested investments such as virtual currency,” she wrote.
Governor Hobbs already stated she would veto bills not part of a bipartisan agreement on disability funding, so the veto in a way came as no surprise.
Meanwhile, a companion bill, SB1373, that would permit as much as 10% of Arizona’s rainy-day fund to be invested in cryptocurrency like Bitcoin awaits a final vote. Its future is uncertain following Hobbs’ strong warning on the subject.
Arizona is not alone in debating this issue. Concurrent efforts also recently failed in Oklahoma, South Dakota, Montana, and Wyoming. North Carolina’s House recently approved a bill allowing the state treasurer to make limited cryptocurrency investments, symbolizing the divide concerning what states do about digital asset policy.
