Arizona Governor Katie Hobbs has vetoed two legislative proposals aimed at expanding the state’s crypto exposure, citing ongoing market volatility. Announced Monday, the decision coincided with her approval of a separate bill regulating cryptocurrency ATMs.
One vetoed proposal, Senate Bill 1373, sought to establish a Digital Assets Strategic Reserve Fund, which would have allowed the state to hold cryptocurrencies obtained through seizures or legislative action. Though it didn’t authorize new purchases, the bill aimed to formalize a custody framework.
In her veto message to Senate President Warren Petersen, Hobbs cited cryptocurrency’s price volatility.
“Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars,” she wrote.
The move signals Hobbs’ cautious stance toward integrating crypto into public finance, despite her support for tighter consumer protections elsewhere.
Bitcoin Reserve and Payment Bills Also Rejected
Senate Bill 1025, also known as the Arizona Strategic Bitcoin Reserve Act, proposed investing up to 10% of the state treasury and retirement portfolios in digital assets like Bitcoin. The bill faced bipartisan criticism over exposing taxpayer funds to speculative markets.
Hobbs’ veto aligns Arizona with at least nine other U.S. states that have recently rejected similar digital asset reserve proposals, according to data from Bitcoin Laws.
She also vetoed Senate Bill 1024, which would have permitted state agencies to accept cryptocurrency for tax payments and fees through third-party processors. Though designed to buffer the state from price swings, Hobbs said it still posed “too much risk” to public operations.
New Law Enforces Crypto ATM Protections Statewide
Despite rejecting the broader crypto reserve proposals, Hobbs signed House Bill 2387—Arizona’s first comprehensive law regulating crypto ATMs and kiosks.
The new law requires operators to implement strong fraud prevention measures, including multi-language warnings, printed receipts with blockchain transaction details, and blockchain analytics tools to block transfers to illicit wallets.
Additionally, the law caps transactions at $2,000 per day for new users and $10,500 for returning users. It also mandates 24/7 customer service and compliance with AML standards, ensuring a regulated environment for crypto transactions at the retail level.
Governor Hobbs also signed House Bill 2749, which modernizes the state’s approach to unclaimed property in the digital age.
The bill, introduced by House Commerce Committee Chair Jeff Weninger, allows Arizona to retain unclaimed cryptocurrencies in their native form, rather than converting them to fiat. This update reflects the growing legal recognition of digital assets in state property codes.
Quick Facts
- Governor Katie Hobbs vetoed two crypto-related bills, citing volatility.
- Senate Bill 1025 proposed investing up to 10% of state funds in crypto.
- SB1024 would have enabled crypto payments for taxes and fees.
- HB2387, regulating crypto ATMs, was signed into law with strict rules.
