Arizona Bitcoin Reserve Plan Crushed as Governor Vetoes Bill

Key Points

• Arizona Bitcoin Reserve Plan Crushed as Governor Vetoes Bill
• Governor Katie Hobbs vetoes Bitcoin reserve bill
  
•  Cites risk of using public funds for “untested assets”
  
•  Bill had passed Arizona House with narrow margin
  
•  Similar crypto reserve efforts failing across US states

Arizona’s bold push to integrate Bitcoin into its state reserves has come to an abrupt halt. Governor Katie Hobbs vetoed Senate Bill 1025, which aimed to allow the state to invest in Bitcoin using seized funds. The move would have made Arizona the first U.S. state to adopt Bitcoin as part of its financial reserves.

Senate Bill 1025, also known as the Digital Assets Strategic Reserve bill, proposed a groundbreaking strategy—investing seized state funds into Bitcoin (BTC) and establishing a crypto reserve overseen by state officials. On April 28, the bill narrowly passed the Arizona House with 31 votes in favor and 25 against.

JUST IN: 🇺🇸 Arizona Governor Katie Hobbs has vetoed the state’s Strategic Bitcoin Reserve legislation after it was passed by the House and Senate.

She called Bitcoin an “untested investment”. pic.twitter.com/TifClCEogN

— Bitcoin Archive (@BTC_Archive) May 3, 2025

However, on Friday, Governor Hobbs vetoed the bill, expressing serious doubts about exposing public funds to what she termed “untested investments.”

“Today, I vetoed Senate Bill 1025. The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments,” Hobbs stated. “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”

Arizona Governor Katie Hobbs has vetoed the state’s Strategic Bitcoin Reserve legislation after it was passed by the House and Senate.

Her decision reflects broader caution in government circles about mixing taxpayer money and volatile crypto markets.

Investors tracking the Bitcoin price surge had hoped that Arizona’s move would set a precedent for broader adoption, but the veto has poured cold water on those expectations.

Source: Governor Katie Hobbs – Techtoken

State and National Bitcoin Investment Push Faces Roadblocks

Arizona’s move joins a growing list of state-level efforts to adopt Bitcoin reserves that have faced setbacks. Similar proposals have recently failed or been withdrawn in Oklahoma, Montana, South Dakota, and Wyoming.

While Arizona’s SB 1025 has been vetoed, a companion bill, SB1373, which would allow the state treasurer to invest up to 10% of the state’s rainy-day fund into digital assets like Bitcoin, still awaits a final vote.

🚫 Arizona Governor Katie Hobbs has vetoed a bill that would’ve allowed the state to hold $BTC in its reserves.

She called it an “untested investment” and rejected the idea of using retirement funds for crypto exposure. pic.twitter.com/tfTAtn2at5

— Satoshi Club (@esatoshiclub) May 3, 2025

Interestingly, not all states are retreating from crypto investment strategies. North Carolina’s House passed the Digital Assets Investment Act on April 30, permitting up to 5% of certain state funds to be allocated to approved cryptocurrencies. The bill now heads to the state Senate.

At the federal level, momentum is also building. Former President Donald Trump signed an executive order in March proposing the creation of a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.” Republican lawmakers have also shown increased interest in government-held Bitcoin reserves.

Yet, the veto in Arizona highlights the uphill battle crypto faces in gaining public-sector trust.

For investors, the mixed signals from government leaders mirror the divided stance of Ethereum whales, who remain split on the long-term potential of crypto investments.

Crypto Regulation and Scandals Keep Pressure High

Beyond political roadblocks, the crypto industry continues to grapple with regulatory uncertainty and scandals. Recent events like the ZachXBT Bitcoin theft revelations have added to public skepticism.

Additionally, rumors such as the Ripple Circle buyout and the volatile activity surrounding Ether memecoin trading firms keep the crypto market in a state of constant flux.

These developments may have influenced policymakers like Hobbs, who prefer caution over experimentation when it comes to public funds.

While innovation drives the crypto industry forward, the Arizona Bitcoin reserve veto serves as a reminder that mainstream financial acceptance remains a work in progress.