- Arizona House passes bills to allow Bitcoin in state treasury amid unresolved budget standoff.
- One measure allows investing up to 10% of state funds in Bitcoin, while another establishes a crypto fund using confiscated assets.
- Governor Hobbs’ veto pledge threatens newly passed crypto legislation pending budget agreement.
Arizona lawmakers have approved two separate bills that would allow the state to invest in Bitcoin and other digital assets, sending both measures to Governor Katie Hobbs amid a budget standoff that threatens to halt their progress. The Arizona House passed the proposals on April 28 following close votes and growing national interest in state-managed cryptocurrency reserves.
The House approved the House Bill 1025 after the vote was 31–25. Even easier, Senate Bill 1373 would have allowed the state treasurer to invest more than $10 million in public funds in Bitcoin and would have authorized the establishment of a reserve fund for the confiscated digital assets during criminal investigations for which had passed 37–19. The Senate already has passed them both and now they are the executive’s.
Digital Asset Reserve Moves Forward as Budget Gridlock Persists
The legislation places Arizona among a small but expanding group of states pursuing digital asset strategies through formal legislative channels. While several states are still in the exploratory phase, Arizona’s two bills, if signed into law, would establish direct mechanisms for holding cryptocurrency within public treasuries.
Among the reasons why SB1025’s supporters would like to see the state allow up to 10% of its funds to be invested in digital assets is that it could act as a hedge against inflation and better diversify Arizona’s holdings. At the same time, SB1373 is not taxpayer funded, but rather cryptocurrency seized in criminal cases will be directed to a reserve fund under the treasurer’s office.
But Republican Representative Jeff Weninger, who sponsored both bills, told The Epoch Times that the goal is to allow Arizona to play in the digital assets arena as interest in digital assets continues to rise. He suggested that Bitcoin allocation is optional and that the state wouldn’t have to divest from existing holdings. Weninger also noted that around 15 other states are also considering similar legislation.
The bills now face another even broader political roadblock. Governor Hobbs has vetoed everything he doesn’t like since April 17 until he gets what he wants from a bipartisan budget. Her position is part of a $122 million shortfall with the Division of Developmental Disabilities. Indeed, she has vetoed a total of 15 bills so far in 2024, more than any other contemporary US governor.
Hobbs has not publicly addressed either SB1025 or SB1373 specifically. Nonetheless, her ongoing veto campaign has cast doubt over whether either measure will survive, regardless of their legislative support.
Votes Reflect Tight Division on Bitcoin Investment Plan
The chamber was sharply divided on voting to take SB1025 to the Senate. It passed on a six-seat margin, and in the final count, it was revealed that no one had been absent or excused. As compared to this, SB1373’s broader support suggests that lawmakers were more willing to allow the creation of a reserve from seized assets, rather than spending directly on emerging cryptocurrencies.
Earlier in the Senate, SB1025 passed 31–25. SB 1373 passed the upper chamber with a larger margin. Four lawmakers also abstained in the House voting session. Opponents of the proposals cited concerns over Bitcoin’s price instability and the lack of consistent federal regulation. They warned that committing state funds to an asset with significant price volatility could expose Arizona’s finances to unnecessary risk.
However, these warnings are in line with a broader national pattern in which states are considering blockchain and digital assets for purposes unrelated to the private sector. If one or the other bill passes, Arizona would be the first state to have the warrant to have a digital asset reserve.
The fate of both bills will now depend on the resolution of the budget impasse and Governor Hobbs’ willingness to lift her veto moratorium. Until then, the state’s effort to integrate Bitcoin into public finance remains on hold.
