Arizona Governor Katie Hobbs has officially vetoed House Bill 2324, a legislative proposal that aimed to create a state-managed reserve fund for holding seized cryptocurrency assets.
The bill, which passed the Arizona House in a 34–22 vote, would have allowed the State Treasurer to oversee a new “Bitcoin and Digital Assets Reserve Fund.” This fund was designed to manage crypto assets obtained through criminal forfeiture and authorize the state to invest, reinvest, or divest in cryptocurrencies and crypto-related ETFs.
Governor Hobbs, however, rejected the proposal in a letter issued Tuesday. She argued that the bill would unintentionally discourage local law enforcement from participating in state-led digital asset forfeiture operations.
By shifting control of seized assets from local jurisdictions to the state fund, the bill would “disincentivize” cooperation from local authorities, Hobbs said.
The veto could have wider implications for cryptocurrency adoption at the state level. While HB 2324 focused on asset forfeiture, it also introduced a new way for governments to interact with digital assets as part of official reserve management.
If enacted, Arizona would have been among the first U.S. states to formally recognize and structure crypto within a public financial framework. Governor Hobbs’ rejection signals continued regulatory caution and reluctance to integrate crypto into government operations.
For the broader crypto market, this could be seen as a setback for public-sector adoption, reinforcing institutional hesitancy and regulatory uncertainty. Without unified state support, mainstream integration of digital assets into government finance remains on hold.
Bitcoin may be entering a typical summer correction phase, according to a July 25 report by crypto financial services firm Matrixport.
Bitcoin has dropped sharply to test its local range low near $115,000, with analysts pointing to renewed whale activity and long-dormant supply movements as key contributors to the decline.
Bitcoin has reached a critical milestone in its programmed supply timeline—only 5.25% of the total BTC that will ever exist remains to be mined.
Strategy the company formerly known as MicroStrategy, has announced the pricing of a new $2.47 billion capital raise through its initial public offering of Variable Rate Series A Perpetual Stretch Preferred Stock (STRC).