A bill permitting public retirement funds to allocate up to 10% in Bitcoin has been vetoed by the Governor of Arizona.
Senate Bill 1025, referred to as the “Arizona Strategic Bitcoin Reserve Act,” was vetoed on Friday by Governor Katie Hobbs, halting a legislative initiative that aimed to authorize state treasurers and retirement systems to allocate up to 10% of state funds into Bitcoin and other cryptocurrencies.
In a letter directed to Senate President Warren Petersen, it was stated by Governor Hobbs that the Arizona State Retirement System ranks among the nation’s strongest because of “sound and informed investments,” and she emphasized that retirement funds should not be used to experiment with unproven assets such as cryptocurrencies.
According to a national tracker monitoring legislative activity, Arizona has become the sixth state to reject a Strategic Bitcoin Reserve proposal, while similar legislation remains under consideration in 19 other states.
On Saturday, a tweet was posted by Anthony Pompliano, head of Professional Capital Management—an investment firm leveraging content channels for deal sourcing and consumer interaction—stating, “Imagine the ignorance of a politician to believe they can make investment decisions.”
The bill, which was approved by both legislative chambers without any amendments, proposed the establishment of a framework allowing the state to invest in digital assets and potentially store them in a federally created “Strategic Bitcoin Reserve,” should such a reserve be established.
The measure was included in a wider cryptocurrency policy initiative within Arizona, accompanied by companion legislation SB1373, which is still awaiting action on the governor’s desk.
SB1373, known as the “Digital Assets Strategic Reserve Fund,” would permit the management of digital assets by the state that were obtained through appropriations or confiscations, including those resulting from criminal proceedings.
In contrast to SB1025, authorization for the investment of public funds is not granted by SB1373; rather, it sets forth custody procedures and exempts the fund from the state’s typical fiscal year lapse regulations.
Although SB1025 has been vetoed, SB1373 remains eligible for approval if it is interpreted by Governor Hobbs as an administrative tool rather than as support for speculative exposure to cryptocurrency.
A decision by Governor Hobbs on that bill may be seen as an indicator of whether Arizona’s wider digital asset framework will be sustained beyond the present legislative session.
Although both measures were approved by the Legislature earlier this year, an intention to veto Republican-backed proposals not linked to budget discussions had been previously indicated by Governor Hobbs.
With her action, Arizona has become the most recent state in which crypto-related public finance legislation has been halted, despite increasing interest in such initiatives across the country.
