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Arizona's Bitcoin legislation stalled despite growing support, with the reasons for its collapse detailed.
Arizona's historic bid to introduce a Bitcoin reserve into the state's official financial system hit a snag as Governor Katie Hobbs vetoed Senate Bill 1025. This controversial legislation aimed to establish Bitcoin holdings within Arizona's reserves, making it the first state to take such a bold move.
Arizona, Buzzkilled on the Bitcoin Reserve Bill
Despite a narrow yet triumphant House vote, the dreams of Bitcoin advocates were dashed when Hobbs vetoed the bill. The Arizona Strategic Bitcoin Reserve Act, if implemented, would have enabled state officials to manage their digital assets reserves using funds seized from wrongdoers.
Hobbs explained her decision in a statement directed towards the President of the Arizona Senate, Warren Petersen. According to her, the Arizona State Retirement System is at the pinnacle of strength due to its smart and informed investments. She went on to say that "Arizonans' retirement funds are not the playground for the state to experiment with untested investments like virtual currency.”
Digging Deeper
The April 28th narrow approval of the Bitcoin reserve bill by the Arizona House marked a notable stride towards incorporating digital assets into state-level finance. However, Hobbs' veto was a predictable outcome, as she had earlier stated that any bills not already on her desk would be vetoed until a bipartisan consensus was reached on healthcare funding for people with disabilities.
Meanwhile, SB1373, a bill that permits the state treasurer to invest up to 10% of Arizona's rainy-day fund in digital assets like Bitcoin, is still in limbo, waiting for a final vote.
Happenings in Other States and at the Federal Level
Arizona's aborted attempt mirrors a broader trend across the U.S., where other states like Oklahoma, Montana, South Dakota, and Wyoming have also failed to gain traction with similar legislative efforts.
In contrast, North Carolina is making progress with the Digital Assets Investment Act. Passed by the House on April 30th, this legislation is poised to allow the treasurer to allocate up to 5% of select funds into approved cryptocurrencies. The bill is now up for consideration in the Senate.
These state-level initiatives echo a broader narrative unfolding at the federal level, where former President Donald Trump and key Republican allies have advocated for a Strategic Bitcoin Reserve. Although an executive order was issued in March, market sentiment, as reflected in Polymarket data, showed zero confidence that such a reserve would materialize within Trump's first 100 days, suggesting skepticism regarding swift federal adoption.
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Following Arizona's veto and North Carolina's passage of the Digital Assets Investment Act, the status of Bitcoin Reserve bills in various U.S. states can be summarized as follows:
- Arizona: Vetoed Legislation: Arizona Governor Katie Hobbs vetoed bills that would have established a state Bitcoin reserve due to concerns about investing public funds in unproven assets like cryptocurrency.
- North Carolina: The Digital Assets Investment Act was passed, although its impact on Bitcoin reserves is not explicitly stated in current searches.
- Other States: Twenty-eight U.S. states have proposed allocating public funds to Bitcoin reserves, with 18 actively advancing through legislative channels, and 15 progressing to the House of Representatives for further refinement of the legal framework.
- National Level: The U.S. Treasury is developing a Strategic Bitcoin Reserve as mandated by an executive order, with the intention of utilizing seized Bitcoin assets and managing them using strategies outlined in a forthcoming report.
- Arizona Governor Katie Hobbs vetoed Senate Bill 1025, a controversial legislation aiming to establish Bitcoin holdings within Arizona's reserves, making it the first state to do so.
- The Arizona Strategic Bitcoin Reserve Act, if implemented, would have allowed state officials to manage digital assets reserves using funds seized from wrongdoers, but the vetoed bill dashed the dreams of Bitcoin advocates.
- Hobbs stated that Arizona's retirement funds are not a playground for the state to experiment with unproven investments like virtual currency, citing the Arizona State Retirement System's strength as a result of smart and informed investments.
- Meanwhile, SB1373, which permits the state treasurer to invest up to 10% of Arizona's rainy-day fund in digital assets like Bitcoin, is still waiting for a final vote.
- Other states like Oklahoma, Montana, South Dakota, and Wyoming have also failed to gain traction with similar legislative efforts, mirroring Arizona's situation.
- In contrast, North Carolina is making progress with the Digital Assets Investment Act, which allows the treasurer to allocate up to 5% of select funds into approved cryptocurrencies, and is now up for consideration in the Senate.
