Arizona’s Governor Katie Hobbs has put the brakes on two significant cryptocurrency bills, sending ripples through the digital currency community. On May 12, Hobbs vetoed Senate Bill 1373, which proposed a Digital Assets Strategic Reserve Fund. This move followed her rejection of the ambitious Senate Bill 1025, the “Arizona Strategic Bitcoin Reserve Act,” on May 3. In a bid to tighten regulations, she approved a separate measure targeting Bitcoin ATMs.
Hobbs’ Crypto Conundrum
Governor Hobbs’ latest decisions underscore her cautious stance on integrating digital currencies into state finances. Her veto of SB 1373, which would have allowed Arizona to hold crypto assets through seizures or legislative allocations, was grounded in concerns over market volatility. Hobbs elaborated in her veto letter, “Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.” Instead, she referenced existing legislation that permits the state to engage with cryptocurrency without risking public funds. This cautious approach aligns with her previous statements, as detailed in Arizona Governor Calls Crypto an ‘Untested Investment,’ Vetoes Bitcoin Reserve Bill.
Earlier, Hobbs shelved SB 1025, a more audacious proposal that sought to invest up to 10% of the state’s treasury and retirement funds in Bitcoin and other digital assets. The decision reflects a broader trend of hesitancy among U.S. states, despite the fact that 26 have introduced strategic crypto reserve bills, with 18 still active, according to bitcoinlaws.io. This hesitancy is mirrored on a national level, as highlighted in U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer.
Bitcoin ATMs Under Scrutiny
While shutting down these ambitious crypto initiatives, Hobbs has tightened the reins on Bitcoin ATMs through House Bill 2387. This new legislation, also signed on May 12, aims to enhance consumer protection by mandating clear, multilingual warnings on kiosks about prevalent scams. Users will need to acknowledge these risks before transactions. Additionally, the bill enforces a daily transaction cap of $2,000 for newcomers and $10,500 for users after ten days, alongside the requirement for 24/7 toll-free customer service.
The bill’s provisions are a response to fraud concerns, with a stipulation that allows users duped into sending crypto to seek full refunds, including fees, if reported within 30 days. Arizona hosts 20 active Bitcoin ATMs, as reported by CoinATMRadar, underscoring the significance of this regulatory tightening.
A Door Ajar for Digital Assets
Despite these vetoes, Hobbs hasn’t entirely closed the book on digital currencies. She recently signed House Bill 2749, updating Arizona’s unclaimed property laws to encompass digital assets. This legislation permits the state to hold unclaimed cryptocurrencies in their original form, paving the way for a nuanced relationship with digital assets.
Analysts believe Hobbs’ decisions indicate a strategic balancing act. “It’s a cautious dance between innovation and risk management,” notes crypto analyst Jenna Harris. “Hobbs seems determined not to stifle technological advancement, yet she’s wary of the inherent volatility.”
These legislative moves come at a time when global crypto markets are navigating unprecedented volatility. In this context, Hobbs’ decisions are a microcosm of the broader debate on how traditional financial systems and burgeoning digital currencies can coexist.
As Arizona charts its digital currency course, questions linger about the future policy landscape. Will Hobbs’ pragmatic approach set a precedent for other states? Or will it simply be a footnote in the evolving saga of digital finance? Only time will tell, but for now, Arizona’s cautious crypto dance continues.
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This article is based on: Arizona governor kills two crypto bills, cracks down on Bitcoin ATMs
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
