Arizona Governor Vetoes Bitcoin Reserve Bill
Arizona Governor Rejects State Bitcoin Reserve
Arizona Governor Katie Hobbs vetoed Senate Bill 1025 on May 2, 2024, effectively rejecting the creation of a state Bitcoin reserve. This decision marks a significant setback for proponents of Bitcoin adoption in state-level government and is the first veto of its kind by a sitting US governor.
The bill, which had garnered bipartisan support, aimed to allow Arizona to allocate a portion of its funds to Bitcoin. However, Governor Hobbs expressed concerns regarding the volatility and untested nature of cryptocurrencies in a letter to Senate President Warren Petersen. She emphasized the need for the Arizona State Retirement System (ASRS) to prioritize stable investments to protect the retirement savings of Arizona residents.
Concerns about Volatility and Risk
Governor Hobbs' statement highlighted the inherent risks associated with Bitcoin’s price fluctuations. She argued that the ASRS, responsible for managing retirement funds, should not invest in such volatile assets.
“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,” the governor stated.
Political Landscape and Future of State Bitcoin Reserves
The veto reflects the broader skepticism within the Democratic Party towards integrating cryptocurrencies into state financial systems. While Arizona's legislature had previously passed the bill with bipartisan support, making history as the first state to do so in both chambers, the governor's decision underscores the challenges in implementing Bitcoin reserves at a state level.
Another bill, Senate Bill 1373, which would allow Arizona to manage cryptocurrencies seized through legal means, remains pending. The outcome of this bill remains uncertain following the veto of SB 1025.
Arizona now joins Oklahoma, Montana, North Dakota, and Wyoming, where similar initiatives have stalled or failed. However, momentum for state-level Bitcoin reserves continues in other states, such as New Hampshire, where a proposal is awaiting a final vote.
Federal Efforts and the BITCOIN Act
At the national level, Senator Cynthia Lummis continues to advocate for the BITCOIN Act, which aims to establish a federal Bitcoin reserve. The bill has received support from President Donald Trump, who sees it as a potential solution to the national debt.
“The BITCOIN Act is the only solution to our nation’s $36T debt. I’m grateful for a forward-thinking president who not only recognizes this, but acts on it,” Senator Lummis stated.
The BITCOIN Act proposes acquiring up to 1 million BTC over five years, with the goal of stabilizing US fiscal policy and enhancing the nation's position in global financial innovation.
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