Arizona’s bid to become the first U.S. state to hold Bitcoin as part of its financial reserves has officially been halted. On Friday, Governor Katie Hobbs vetoed a bill that would have enabled state agencies to invest in Bitcoin using seized assets, calling the move too risky for taxpayer-backed funds.
Governor Rejects “Untested” Crypto Investment
The proposed legislation, titled the Digital Assets Strategic Reserve Bill (SB1025), would have allowed Arizona to allocate certain funds into Bitcoin and establish a state-managed digital asset reserve. While the bill narrowly passed the state House with a 31–25 vote, Hobbs swiftly struck it down.
In a written statement to Senate President Warren Petersen, Governor Hobbs defended her decision by highlighting the state’s responsibility to safeguard retirement savings.
“The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments,” Hobbs said. “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”
Her veto aligns with a previously stated position: she would reject any bill not tied to bipartisan efforts addressing disability services funding.
Bitcoin Reserve Efforts Stumble Nationwide
Arizona is not alone in its struggle to integrate Bitcoin into public financial systems. Similar proposals have recently failed or been withdrawn in states including:
- Oklahoma
- Montana
- South Dakota
- Wyoming
Meanwhile, another Arizona bill, SB1373, remains in legislative limbo. This proposal would allow the state treasurer to invest up to 10% of the rainy-day fund in digital assets such as Bitcoin. It has yet to receive a final vote.
Some States Still Pushing Ahead
Despite setbacks in several states, the push to incorporate digital assets into government reserves is gaining momentum elsewhere. On April 30, North Carolina’s House approved the Digital Assets Investment Act, which would allow the treasurer to invest up to 5% of eligible funds in vetted cryptocurrencies. The bill is now headed to the state Senate.
At the federal level, the conversation is also advancing. President Donald Trump signed an executive order in March proposing the formation of a Strategic Bitcoin Reserve and a broader Digital Asset Stockpile. These developments reflect growing political support among Republican lawmakers for integrating digital currencies into national fiscal strategy.
