Arizona’s effort to lead the crypto charge just hit a wall. Governor Katie Hobbs vetoed two major crypto bills, effectively halting plans to make Bitcoin part of the state’s financial system. Her decisions have triggered sharp reactions across the crypto community. While Hobbs did approve one crypto-related law, critics argue that Arizona is stalling when it should be leading.
Bitcoin Reserve Bill Veto Sparks Controversy
The most talked-about proposal was the Bitcoin reserve bill, Senate Bill 1373. It aimed to let Arizona hold Bitcoin as part of its rainy-day fund. Up to 10% of the state’s reserve could have been kept in crypto. That would’ve made Arizona only the second U.S. state to do so, after New Hampshire. But Governor Hobbs shut it down.
She cited volatility and risk as her main reasons. In her words, Bitcoin is too unstable for taxpayer money. Yet just days before, she signed a separate law allowing Arizona to hold unclaimed digital assets in their original form. Critics say this shows a double standard. If the state can hold crypto it doesn’t own, why not the crypto it invests in?
Katie Hobbs: Tough on Bitcoin Bills, Soft on Crypto ATMs
Governor Hobbs didn’t stop at one veto. She also rejected SB 1025 and SB 1024. One would have invested part of the state’s retirement fund in Bitcoin. The other would have allowed residents to pay taxes and fines with crypto. Together, these bills would have pushed Arizona to the front of crypto innovation.
Instead, Hobbs signed House Bill 2387. It regulates Bitcoin ATMs, adding rules for transparency and fraud protection. Operators now must display scam warnings, offer receipts, and limit daily transactions. Critics see this as backward. Arizona isn’t ready to embrace Bitcoin for payments—but it’s ready to regulate how people use it. That’s not exactly forward-thinking, according to many in the crypto world.
Community Pushes Back Against Arizona’s Stance
Crypto advocates didn’t hold back. Influencers like Anthony Pompliano blasted the Governor’s decision. He called it ignorant and shortsighted. State Senator Wendy Rogers echoed that, saying Arizona needs Bitcoin, not the other way around.
These bills had the potential to make Arizona a crypto trailblazer. Instead, the state now lags behind others like Wyoming, Florida, and New Hampshire. Those states are actively building crypto reserves or accepting digital assets for taxes. Arizona, by contrast, seems stuck in neutral.
Bitcoin Future in Arizona Still Unclear
Despite the setbacks, Arizona hasn’t closed the door entirely. Hobbs did approve House Bill 2749. It lets the state keep unclaimed crypto in its digital form. That’s a small but meaningful shift. It shows that even skeptics like Hobbs see some long-term value in Bitcoin.
Still, the big moves—Bitcoin reserves, crypto tax payments, and retirement fund investments—are on hold. Until Arizona leadership gets more comfortable with digital assets, the state will miss out on early advantages. As Bitcoin adoption rises across the U.S., more states are stepping up. For now, Arizona isn’t one of them.
