- Governor Hobbs vetoed Arizona’s crypto investment bill, halting a potential $2B shift into volatile digital assets.
- The bill’s failure highlights deep legislative divides and Hobbs’ insistence on prioritizing a bipartisan healthcare-focused budget.
- Cryptocurrency advocates are furious, but Arizona joins Utah in pausing state-level Bitcoin plans amid political and financial caution.
Arizona’s proposal to put as much as 10% of its state money into cryptocurrencies has been suddenly stopped. The bill was vetoed by Governor Katie Hobbs on April 26, 2025, in an effort to make a major shift in state investment policy. The stalled bill passed both houses of the GOP legislature, indicating robust political will, before Hobbs acted on the proposal.
The plan was intended to allow Arizona’s treasurer and retirement systems to place part of their portfolios of potentially hundreds of millions in cryptocurrencies such as Bitcoin. Those supporting the legislation saw it as getting ahead in state investment policy, particularly with North Carolina and Texas taking steps in that direction. But Hobbs disagreed that the state should not gamble with public money.
“The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency,” said Hobbs in a veto letter.
Arizona’s Crypto Bill Collapses
The veto further annoyed those who support the use of cryptocurrencies, most prominently the CEO of Bitcoin Magazine, David Bailey, who tweeted on X, Impeach Katie Hobbs; she just screwed Arizona. His exasperation highlighted the increasing tension between proponents of the industry and prudent public officials who fear market volatility.
The failure of the bill also represented deeper divisions in Arizona state government. Hobbs earlier indicated that she wouldn’t move forward with any unassociated bills until legislators signed off on a bipartisan budget that protected healthcare coverage for individuals with disabilities. This condition further tied the fortunes of any bill related to crypto to wider policy disputes that were not associated with Bitcoin or finance.
Bitcoin’s growing trend as part of national reserves has pushed Arizona to follow. Iowa and Missouri are discussing similar actions, though none have succeeded so far. North Carolina has advanced its Digital Assets Investment Act, approving a more modest limit of 5% on holding crypto assets. But Arizona has demonstrated how tricky—and politically charged—such initiatives can be.
Hobbs’ Veto Freezes $2B Crypto Plan
Governor Hobbs’ veto of SB 1025 not only put on ice the immediate proposal on Bitcoin investment but overshadowed all the pending digital asset bills. Among these, SB 1373 continues to hang in legislative limbo, unsure of its fate as Senate Democrats consider House changes. Even its proponents now expect that bill to struggle with Hobbs’ adamant stance.
Arizona’s aborted crypto plans are similar to those of Utah, which also retreated from its own Bitcoin reserve project earlier in the year. These developments indicate that while legislators in multiple states are willing to consider exploring crypto reserves, political reality and general budget issues are still driving decision-making.
The stalled legislation might have made up to $2 billion in new digital assets available to Arizona’s retirement systems. That capital will instead stay in traditional investments while Hobbs’ administration maintains its priority on steady, proven methods.
