Discussions continue in Arizona regarding the integration of crypto assets into the public finance system. Governor Katie Hobbs vetoed a bill that aimed to create a state-wide reserve fund consisting of crypto assets. House Bill 2324 had previously passed the House of Representatives by a vote of 34 to 22. However, Hobbs rejected the bill, arguing that it could reduce cooperation with local law enforcement agencies.
Arizona Governor rejects cryptocurrency bill
The bill regulated how cryptocurrencies seized by the state from illegal activities would be managed. According to the bill, the first $300,000 of confiscated cryptocurrency would be transferred to the Attorney General's office, 50% of the remaining amount would go to the Attorney General's office, 25% would go to the state's general fund, and the remaining 25% would be directed to the newly established Bitcoin and Digital Assets Reserve Fund. However, Hobbs stated that taking these resources away from local law enforcement agencies would reduce motivation for cooperation in practice.
In his veto letter on the matter, Governor Hobbs stated, “The inability of local judicial authorities to directly benefit from seized cryptocurrency assets may weaken cooperation in practice.” Although the bill could technically be passed again with a two-thirds majority, this seems unlikely given the current political situation.
This veto is in line with Hobbs' cautious approach to cryptocurrencies. He had previously vetoed Senate Bill 1025, which passed the Senate on May 10. This bill would have allowed Arizona to invest up to 10% of its financial reserves in Bitcoin. Hobbs had characterized this move as a “risky and untested investment.” Similarly, another bill, SB 1373, which aimed to create a strategic reserve from seized cryptocurrency assets, was also rejected by Hobbs.
However, Hobbs is not opposed to all cryptocurrency regulations. The HB 2749 bill, passed in May, established a legal definition for cryptocurrency assets in Arizona's financial laws and abandoned property laws, and introduced regulations on how these assets should be managed by the state treasury. However, this law does not include any provisions regarding the use of seized cryptocurrency assets.
Alongside these developments in Arizona, other US states continue to take steps regarding cryptocurrency. For example, as we previously reported, Texas Governor Greg Abbott approved a law last month that would establish a state-wide Bitcoin reserve. Similarly, New Hampshire has also opened the door to investments in both cryptocurrencies and precious metals. As of now, similar legislative proposals are on the agenda in at least six different state legislatures. In conclusion, the battle over cryptocurrency regulations in Arizona continues. Other bills, such as SB 1062, are still on the agenda.
