- Arizona vetoes bill to invest public funds in Bitcoin, halting crypto reserve plan.
- Governor cites risk to retirement assets, calls Bitcoin an untested investment.
- Similar crypto reserve bills are under review in Iowa, Missouri, and Texas.
Arizona Governor Katie Hobbs has vetoed a bill that would have authorized the state to invest a portion of its funds in Bitcoin, ceasing an effort to create a digital asset reserve within the state treasury. The move unexpectedly ended a Republican-led initiative to make Arizona the first U.S. state to allocate public funds to cryptocurrency.
Senate Bill 1025, passed by the Republican-majority state Senate and House of Representatives on April 26, proposed allowing Arizona’s state treasurer and public retirement systems to invest up to 10% of their assets in virtual currencies such as Bitcoin. The legislation outlined the use of seized assets to back the proposed investments and create a digital asset reserve managed by the state.
The bill passed the House with a narrow 31–25 vote and had the support of two Republican lawmakers who co-sponsored the measure. However, the legislation did not progress beyond the governor’s desk. Governor Hobbs issued a veto soon after the bill’s arrival, effectively ending the legislative push.
Governor Cites Risk to Retirement Funds
In her formal veto letter, Governor Hobbs emphasized concerns about applying public funds to what she described as “untested” assets. She defended the performance and strategy of the Arizona State Retirement System, stating that its strength lies in its commitment to informed investment decisions.
According to Hobbs, virtual currencies such as Bitcoin do not meet the investment standards necessary for safeguarding retirement funds. She wrote that the state’s retirement system “is one of the strongest in the nation because it makes sound and informed investments,” adding that Arizonans’ retirement savings should not be exposed to the volatility of digital assets.
Wider Political Context and Reactions
The veto aligns with the governor’s previously stated position that she would not approve new legislation until a bipartisan funding plan is passed, particularly one that protects healthcare services for Arizonans with disabilities. That broader fiscal context played a role in the timing of the veto.
Following the decision, some public criticism emerged on social media. Bitcoin Magazine CEO David Bailey responded to the veto in a post on X, expressing frustration with the outcome.
Arizona is not alone in exploring incorporating Bitcoin into state-level financial strategy. Iowa, Missouri, and Texas Legislatures are also considering similar Bitcoin reserve bills. However, no comparable proposals have been signed into law in any state since early May 2025.
The Arizona bill’s rejection underscores the ongoing debate around the role of cryptocurrencies in public finance. If passed, Arizona would have become the first state to formally invest in Bitcoin as part of its reserve strategy, possibly outpacing even the federal government in digital asset adoption.
