Arizona Shuts Down Bitcoin Reserve Plan as Governor Vetoes Crypto Investment Bill

Arizona’s bid to become the first U.S. state to hold Bitcoin as part of its official reserves has been shut down.

Governor Katie Hobbs has vetoed legislation that would have allowed state funds to be allocated to digital assets, putting a halt to what would have been a historic shift in state-level finance.

The bill, known as the Digital Assets Strategic Reserve proposal, sought to authorize the use of seized state funds for investment in Bitcoin and establish a state-run crypto reserve. Despite passing both chambers of the legislature, Hobbs formally rejected it on Friday, citing concerns over financial stability and risk.

In her statement, Hobbs pointed to the strength of Arizona’s retirement system, noting its success is due to prudent, traditional investing—not speculation. She emphasized that retirement savings are no place for experiments with assets like cryptocurrency, which she referred to as “untested.”

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Although the bill had gained traction—passing in the House with 31 votes in favor versus 25 against—it faced strong opposition from Hobbs, who had also warned she would veto unrelated bills without bipartisan cooperation on disability funding.

A second proposal, SB1373, which would allow up to 10% of Arizona’s rainy-day fund to be allocated to digital assets, still awaits a final vote. However, with the governor’s stance now clearly outlined, its future looks uncertain.

Arizona now joins a growing list of states—including Montana, South Dakota, Oklahoma, and Wyoming—where similar initiatives to establish crypto reserves have stalled or failed outright. Meanwhile, North Carolina has moved in the opposite direction, recently advancing a bill that would allow limited crypto investments by the state treasury.

These efforts mirror a wider push on the national stage, with President Donald Trump having already signed an executive order proposing a federal-level Bitcoin reserve. Still, for now, Arizona won’t be following that lead.

Alexander Stefanov