Arizona’s Governor slows down the adoption of bitcoin as a strategic reserve, citing concerns over market volatility.
On May 12, Governor Katie Hobbs vetoed two bills related to Bitcoin and digital assets, while approving a separate measure focused on the safety of crypto ATMs.
The Governor rejected Bill SB1373, which would have established a strategic reserve fund for digital assets meant to hold cryptocurrencies obtained through seizures or legislative appropriations. While the proposal did not authorize the use of public funds for directly acquiring digital assets, it outlined a regulatory framework for the custody and management of such assets.
In her veto letter addressed to Senate President Warren Petersen, Hobbs wrote:
“Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.”
This decision follows the recent rejection of Bill SB1025, known as the Arizona Strategic Bitcoin Reserve Act, which would have allowed the allocation of up to 10% of the state treasury and pension funds into bitcoin or other digital assets. Unlike SB1373, this proposal would have committed taxpayer-backed funds, including retirement savings, to the direct purchase of bitcoin on the market.
With these vetoes, Arizona joins nine other U.S. states that have formally blocked similar bitcoin reserve legislation.
Crypto payment proposal rejected for “excessive risk”
Governor Hobbs also vetoed Bill SB1024, which would have allowed Arizona agencies to accept cryptocurrency payments for fines, taxes, and fees through agreements with verified service providers. While acknowledging the bill’s intention to shield the state from volatility, Hobbs stated in her veto letter that it “still leaves the door open to too many risks.”
Crypto ATM regulation: the only bill approved
The only cryptocurrency-related legislation to gain the Governor’s signature was HB2387, a regulation for crypto ATMs. The new law requires ATM operators to display multilingual anti-fraud warnings, issue receipts with transaction hashes and wallet addresses, and use blockchain analysis to prevent the transfer of funds to wallets flagged for fraudulent activity.
The law also limits total transactions for new customers to $2,000 per day and $10,500 for existing customers at crypto ATMs. Operators must provide 24/7 customer support and document every transaction in line with anti-money laundering protocols.
