Governor Hobbs halts historic crypto initiative as national Bitcoin reserve plans gain momentum.

Arizona Governor Katie Hobbs has vetoed Senate Bill 1025, a groundbreaking proposal that would have allowed the state to establish a strategic Bitcoin reserve. The decision, issued on May 2, marks the first instance of a sitting U.S. governor rejecting such a crypto-forward initiative.

The bill, which garnered rare bipartisan support and passed both legislative chambers, aimed to integrate Bitcoin into Arizona’s financial planning, particularly through the Arizona State Retirement System (ASRS). However, Hobbs firmly opposed the idea, citing the risks associated with untested virtual assets.

Governor Cites Stability Over Speculation

In her veto letter to Senate President Warren Petersen, Hobbs stressed that the ASRS must continue to focus on “sound and informed investments.” She labelled cryptocurrencies as “untested” and not suitable for the retirement funds of Arizonans.

“The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency,” Hobbs stated.

The move reflects a cautious stance within the Democratic Party on crypto integration into public financial systems, despite the growing popularity of digital assets.

Second Crypto Bill Awaits Decision

Senate Bill 1025 wasn’t the only crypto-related legislation on the table. Senate Bill 1373, another digital asset proposal, is still pending gubernatorial review. If passed, it would permit Arizona to retain cryptocurrencies obtained through legal seizures and allow the state treasurer to lend them to generate income.

With SB 1025 now vetoed, the fate of SB 1373 hangs in the balance, casting uncertainty over Arizona’s future involvement in the crypto space.

Nationwide Momentum Continues Despite Setbacks

Arizona now joins Oklahoma, Montana, North Dakota, and Wyoming-states where efforts to create Bitcoin reserves have similarly stalled. However, interest in Bitcoin reserves remains strong across the U.S.

New Hampshire is on the cusp of legislative approval for its own Bitcoin reserve bill, having successfully passed committee review. A full vote in the state’s second legislative chamber is expected soon.

At the federal level, Senator Cynthia Lummis is pushing the BITCOIN Act, a proposal that would enable the U.S. government to acquire up to 1 million BTC over five years. Former President Donald Trump has recently voiced support for the plan.

“The BITCOIN Act is the only solution to our nation’s $36T debt,” said Lummis. “I’m grateful for a forward-thinking president who not only recognises this, but acts on it.”