tl;dr
Arizona is close to becoming the first U.S. state to hold Bitcoin and other digital assets in its Treasury through Senate Bill 1373 and Senate Bill 1025, which would create a digital assets fund and allow investment of up to 10% in Bitcoin. However, Governor Katie Hobbs has threatened to veto all ne...
Arizona is on the brink of becoming the first U.S. state to hold Bitcoin and other digital assets in its Treasury through Senate Bill 1373 and Senate Bill 1025. These bills aim to create a digital assets fund and allow investment of up to 10% in Bitcoin. Senate Bill 1373 proposes a Digital Assets Strategic Reserve Fund managed by the state treasurer, using digital assets seized by the state and legislative appropriations. The state treasurer would be authorized to invest up to 10% annually in digital assets and lend these assets to generate returns without increasing financial risk. Senate Bill 1025 permits the state Treasury and retirement system to invest up to 10% of available funds specifically in Bitcoin.
However, Governor Katie Hobbs has threatened to veto all new legislation until lawmakers address a $122 million funding shortfall for the state’s Division of Developmental Disabilities. She stated, “Business as usual cannot continue. Any bill not already on my desk will be vetoed.” This political standoff casts uncertainty on whether Arizona’s bills will become law, despite strong Republican support and momentum behind the crypto initiatives.
Arizona’s efforts contrast with other states where similar bills have faltered. Oklahoma recently collapsed its Strategic Bitcoin Reserve Act during Senate review, and Montana, North Dakota, and Wyoming have also seen failed attempts. Utah shifted away from direct Bitcoin holdings, opting instead for legal protections around crypto custody and mining. Meanwhile, Texas and New Hampshire maintain pending legislation for limited digital asset investments. Currently, more than 20 states have active proposals to integrate Bitcoin into state reserves.
Proponents argue that Bitcoin could serve as a hedge against inflation and offer a modern alternative to conventional cash reserves. Critics, however, warn of the speculative nature and financial risks crypto investments pose to taxpayer dollars. Arizona awaits a critical final vote on SB 1373 soon, but Governor Hobbs’ stance may ultimately determine if the state pioneers cryptocurrency integration or joins the growing list of stalled efforts nationwide.