Thomas Daniels
A gubernatorial veto has put a stop to Arizona’s plan to include Bitcoin in its official reserves. Citing the dangers of investing public monies in erratic and “untested” digital assets, Governor Katie Hobbs vetoed Senate Bill 1025.
The Digital Assets Strategic Reserve Act was a proposed law that would enable Arizona to create a state-managed cryptocurrency reserve and invest confiscated cash in Bitcoin. The law was officially vetoed on Friday, even though it had passed the Arizona House on April 28 by a vote of 31 to 25.
In a letter to Senate President Warren Petersen, Governor Hobbs made clear her position. The Arizona State Retirement System is among the best in the country because it adheres to wise, well-informed investment practices, she wrote, adding that “the state should not experiment with unproven investments like virtual currency in Arizonans’ retirement funds.”
Senate Bill 1373, a related idea, is still pending. The state treasurer would be permitted to invest up to 10% of Arizona’s rainy-day fund in digital assets like Bitcoin according to the plan. There hasn’t been a final vote yet.
With this action, Arizona joins a number of states that are battling related legislative efforts. In Oklahoma, Montana, South Dakota, and Wyoming, efforts to create cryptocurrency-based reserves have lately come to a standstill. The Digital Assets Investment Act, on the other hand, has proceeded in North Carolina after passing the state House on April 30. The Senate is currently considering that bill, which would allow the state treasurer to invest up to 5% of specified assets in authorized cryptocurrencies.
The states are not the only ones having a conversation about Bitcoin reserves. A change in the national policy conversation around cryptocurrencies was signaled in March by the signing of an executive order by former President Donald Trump creating a Digital Asset Stockpile and a Strategic Bitcoin Reserve.
The issue of whether and how public funding should engage with digital assets is still up for debate across several jurisdictions.
