Arizona Governor Hobbs Vetoes Measure Supporting a State-Backed Cryptocurrency, Halting the State's Crypto Agenda for Now
In a move that reflects the cautious approach of Arizona's government towards cryptocurrency regulation, Governor Katie Hobbs has vetoed House Bill 2324 (HB 2324), which aimed to establish a Bitcoin and Digital Assets Reserve Fund from seized crypto assets.
The bill, which had a challenging journey through the Arizona legislature, intended to set up a fund from digital assets forfeited in criminal cases, with the proceeds to be split between the attorney general's office, the state general fund, and the new reserve fund. However, Governor Hobbs vetoed HB 2324 on July 2, 2025, citing concerns that the bill could disincentivize local law enforcement from cooperating with the state on digital asset forfeiture.
In her veto letter, Governor Hobbs stated that removing seized crypto assets from local jurisdictions would reduce the incentive for local agencies to work closely with the state, potentially hindering law enforcement cooperation in criminal investigations involving digital assets.
The veto decision mirrors Governor Hobbs' previous rejections of similar digital asset proposals. Earlier in 2025, she signed Arizona House Bill 2749 into law, allowing the state to hold unclaimed cryptocurrencies and establish a Bitcoin reserve without using taxpayer funds. Conversely, she vetoed other bills such as Senate Bill 1025 and SB 1373, which proposed more expansive state investments in crypto assets, citing concerns about volatility and the risk to public funds.
The veto of HB 2324 marks another roadblock in Arizona's crypto ambitions. Despite the successful passage of Arizona House Bill 2749, three other crypto bills have been vetoed by Governor Hobbs during the current legislative session.
The ongoing legislative battles in Arizona reflect broader national debates about how states should handle digital asset management and regulation in the cryptocurrency sector. The contrast between the approved and rejected crypto bills highlights a nuanced approach by state officials towards cryptocurrency regulation, balancing innovation with law enforcement and fiscal prudence concerns.
The pattern of vetoes suggests that Arizona's crypto regulatory environment will continue to be cautious, focusing on policies for unclaimed assets and maintaining law enforcement cooperation rather than expanding into strategic state-held cryptocurrency reserves from seized assets. This approach aligns with Governor Hobbs' commitment to ensuring effective collaboration between different levels of law enforcement.
[1] Arizona Capitol Times, "Governor Hobbs signs HB 2749 into law, allowing state to hold unclaimed cryptocurrencies", May 2025. [2] Arizona Daily Star, "Governor Hobbs vetoes House Bill 2324, creating Digital Assets Reserve Fund", July 2025. [3] Phoenix Business Journal, "Arizona House Bill 2749 becomes law: State can now hold unclaimed cryptocurrencies", May 2025. [4] Arizona Republic, "Governor Hobbs vetoes House Bill 2324: Digital Assets Reserve Fund would have been managed by state treasurer", July 2025. [5] AZCentral, "Governor Hobbs vetoes House Bill 2324: Arizona's crypto ambitions face another roadblock", July 2025.
- The veto of HB 2324 by Governor Hobbs indicates a cautious approach in Arizona's cryptocurrency policy-and-legislation, as seen in her repeated rejections of crypto bills.
- The decision to veto House Bill 2324 aligns with the politics of Arizona, where governance is focused on maintaining law enforcement cooperation and balancing innovation with fiscal prudence concerns in the cryptocurrency sector.
- The veto of HB 2324 and previous rejections of similar digital asset proposals by Governor Hobbs have an impact beyond Arizona, contributing to the broader national debates about state management and regulation of cryptocurrencies, as reported by major general-news outlets like the Arizona Capitol Times, Arizona Daily Star, Phoenix Business Journal, Arizona Republic, and AZCentral.
