- Governor Hobbs vetoed Arizona’s bill to hold Bitcoin in the state’s official reserves.
- Critics warned that Bitcoin’s volatility posed a financial risk to Arizona’s stability.
- Despite setbacks, over 35 digital asset reserve bills remain active across the U.S.
Arizona failed to lead U.S. states by establishing official Bitcoin holdings as part of its reserve assets. Governor Katie Hobbs vetoed the Digital Assets Strategic Reserve bill because she considered Bitcoin an untested investment. The state House approved this bill on April 28 to permit state officials to use seized funds for Bitcoin investments.
The proposed legislation created a management system for the Bitcoin reserve under state administrators. According to an under-development measure, the state treasurer could get authority to put 10% of Arizona’s rainy-day funds into digital assets. A companion bill still requires approval before it can become official legislation.
Advocates of the bill contended that Arizona would set an example in digital asset regulations through its adoption. The initiative received support due to Bitcoin’s rising international government adoption and institutional Bitcoin investments. Supporters of the bill envisioned Arizona becoming a benchmark entity regarding digital financial systems.
Related: Arizona Lawmakers Pass Bitcoin Treasury Bills as Budget Deadlock Threatens Veto
Opponents raised concerns regarding Bitcoin’s highly unpredictable market movements. They asserted that the state’s financial peace would be at risk based on risking public money within volatile digital assets. According to critics, the intense price movement of Bitcoin posed a threat to Arizona’s financial stability.
States Struggling with Bitcoin Reserves
The state of Arizona has joined a growing number of states that have failed attempts to establish Bitcoin reserve funds. Oklahoma’s Bitcoin reserve initiative was rejected in March last month, while Montana, North Dakota, and Wyoming all faced challenging support earlier this year.
States across the nation remain active in their efforts to develop cryptocurrency regulations. The North Carolina House adopted the Digital Assets Investment Act, which permits the state treasurer to invest up to 5% of qualified funds into specific cryptocurrencies. The Senate is currently assessing this bill.
Related: Arizona House Committee Greenlights Bitcoin Reserve Bill
The failed proposal in Arizona does not halt the ongoing digital asset reserve efforts throughout various states across the United States. A total of 35 bills related to digital reserves exist throughout 20 states, while more support this approach. The proposed cryptocurrency legislation has not managed to pass into state law. The state reserve decision made by Arizona exposes the difficulties Bitcoin reserve supporters face in their advocacy.
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