- Arizona’s Bitcoin reserve bill passed both chambers but was vetoed due to fears of exposing public pensions to volatile crypto markets.
- Senate Bill 1025 proposed investing up to 10% of state-managed public funds in virtual currencies like Bitcoin as a strategic reserve.
- Governor Hobbs rejected the bill, warning that retirement systems are not suitable places to experiment with unproven digital assets.
Senate Bill 1025 was vetoed by Arizona Governor Katie Hobbs, who wanted to permit state-controlled retirement funds to invest in virtual currencies like Bitcoin. Passed by both chambers, the bill would have made Arizona the first state in the United States to establish a strategic Bitcoin reserve backed by the government.
Bill Cleared Legislature Despite Narrow Margins
Senate Bill 1025, introduced by Senator Wendy Rogers, proposed permitting state public funds to allocate up to 10% of their assets into virtual currencies. The bill was first read in the Senate on January 14, 2025, and moved through the Finance and Rules Committees with a tight 4-3 vote in Finance, according to a post by Bitcoin News.
The Senate approved the bill on February 27 with a 17-11 vote, after which it advanced to the House. It passed on April 28 with a 31-25 margin, reflecting contentious support across party lines. Despite its legislative momentum, the bill ultimately ended at the governor’s desk.
Hobbs Rejects Bitcoin as Public Asset Strategy
Arizona Governor Katie Hobbs issued a formal veto on May 2, citing concerns over the security and reliability of virtual currency holdings in state-managed funds. Hobbs said the Arizona State Retirement System is “one of the strongest in the nation” due to its conservative and data-driven approach to investments.
According to Hobbs, the bill’s structure would have allowed public funds, including retirement systems and the state treasurer, to divert some of their holdings into unregulated digital assets. The proposal outlined secure custody via a segregated account and aligned its strategy with a potential federal Strategic Bitcoin Reserve, if established by the U.S. Treasury.
State Crypto Policy Faces Broader Setbacks
The bill’s failure adds Arizona to a growing list of states, including Wyoming, South Dakota, and Montana, where similar initiatives to integrate crypto into government reserves have stalled. The companion bill, SB1373, which targets Arizona’s rainy-day fund, remains in limbo and has yet to reach a floor vote.
However, not all states are retreating from crypto. North Carolina recently passed the Digital Assets Investment Act, enabling the state treasurer to invest up to 5% of designated funds into approved cryptocurrencies. Meanwhile, at the federal level, President Trump’s executive order in March proposed a “Digital Asset Stockpile” and a “Strategic Bitcoin Reserve” to be administered by national agencies.
