A notable development reflecting a hardline stance towards digital assets, Arizona Governor Katie Hobbs rejected three key bills aimed at integrating cryptocurrencies into the state's financial system, while approving new legislation imposing strict restrictions on Bitcoin ATMs.

On May 12, Hobbs vetoed Senate Bill 1373, which sought to create a "Strategic Reserve Fund for Digital Assets," allowing the state to hold cryptocurrencies resulting from seizures or official allocations. She stated in her veto message: "The sharp volatility in the digital currency market makes it unwise to use public state funds in this area."

This decision followed the rejection of another more ambitious bill, known as the "Bitcoin Strategic Reserve Act," which would have allowed investing up to 10% of state treasury funds and pension funds in Bitcoin.