In brief
- Arizona Governor Katie Hobbs vetoed the bill, saying it “disincentivizes local law enforcement from working with the state.”
- The bill’s rejection marks Hobbs’ third Bitcoin legislation-related veto this year, as she maintains concerns over exposing state funds to volatile markets.
- One expert says Arizona’s long-term prospects to adopt Bitcoin “don’t necessarily change,” as future leadership is still able to steer a crypto-friendly course.
Arizona Governor Katie Hobbs has knocked back another attempt to establish a state-managed Bitcoin reserve, which would have included other digital assets seized from criminal proceeds.
Hobbs said the bill “disincentivizes local law enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions,” in her veto letter addressed to House Speaker Steve Montenegro in relation to House Bill 2324.
The legislation had passed the Arizona House of Representatives in a 34-22 vote last month after initially failing in May.
Hobbs’ veto marks her third rejection of Bitcoin-related legislation, following her earlier vetoes of two Senate bills in May that would have allowed state treasurers and retirement systems to allocate up to 10% of state funds into Bitcoin and to hold crypto obtained through seizures.
The governor also vetoed a separate bill that same month, which would have allowed Arizona agencies to accept crypto payments for fines, taxes, and fees through agreements with vetted service providers.
Hobbs has consistently pointed to market volatility as a key concern, writing in May that “current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.”
“Bitcoin natives consider the volatility a feature, and 1 BTC is always 1 BTC,” Pranav Agarwal, independent director at Jetking Infotrain India—the country’s first listed bitcoin treasury company—told Decrypt.
“For a public post like a Governor, Hobbs has to take a fiat-denominated stance,” he added. “The volatility plus large drawdowns could potentially hurt her image as being reckless or cavalier.”
However, she did sign House Bill 2749 in May, which allows the state to hold unclaimed crypto in its native form rather than converting it to cash.
Other states, such as Texas and New Hampshire, have adopted strategic Bitcoin reserves, while Arizona has maintained stricter oversight of public funds’ exposure to crypto markets.
Even as the repeated vetoes raise questions about Arizona’s crypto-friendly credentials, Agarwal believes the impact could be limited.
“A future governor could have the opposite view, in the long term, it doesn’t change the state’s prospects to accept crypto, or be seen as crypto-friendly,” he said.
Edited by Sebastian Sinclair
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