Arizona Governor Vetoes Bitcoin Reserve Bill as States Race to Cryptocurrency
Phoenix, Arizona – May 2, 2025 – Governor Katie Hobbs has vetoed Senate Bill 1025, a groundbreaking bill that would have allowed Arizona to become the first U.S. state to include Bitcoin in its official reserve portfolio using forfeited funds. The move comes amid a growing wave of states across the country looking to incorporate digital assets as part of their long-term financial and reserve strategies.
Public Fund Safety Concerns
In her veto message to the Arizona Legislature, Governor Hobbs stressed:
Arizona’s retirement funds are not the place to experiment with unproven investments like cryptocurrencies.
Hobbs said that while SB1025 has the potential to be innovative, it is inconsistent with the conservative, stable investment policies that have made the state’s pension system one of the strongest in the country.
Bitcoin Is Rising in the States
Arizona is not the only state considering Bitcoin reserves. As of May 2025, at least 28 states have proposed public investment in Bitcoin, with 18 actively pushing for legislation.
North Carolina has approved House Bill 92, which would allow the treasurer to invest up to 5% of state funds in digital assets with a market capitalization of over $750 billion – effectively just Bitcoin.
Kentucky has taken the lead in protecting digital asset rights by passing legislation recognizing individual Bitcoin custody and exempting network node operators from licensing.
Other states like Utah, Oklahoma, Florida are preparing the next step to legalize Bitcoin into public finance strategy.
Federal Signal: US Establishes Strategic Bitcoin Reserve
President Donald Trump signed an Executive Order establishing a National Strategic Bitcoin Reserve in early March 2025, requiring all federal agencies to publicly disclose the amount of digital assets they hold. According to Reuters, the US government currently holds more than 198,000 BTC, worth about $18.5 billion.
The order emphasizes that the limited supply of 21 million Bitcoins could be a strategic advantage in global competition, making the US a pioneer in digitizing national reserve assets.
Cryptocurrency Community Reactions
Governor Hobbs' decision has been met with backlash from lawmakers and the blockchain technology community.
State Senator Wendy Rogers, who co-sponsored the bill, said she would reintroduce the bill in the next session.
Businessman Anthony Pompliano quipped:
If she can’t beat Bitcoin, she should buy it.
Bitcoin Market Performance and Investment Futures
After hitting a new high of $108,786 on January 20, 2025, Bitcoin saw a slight correction in the first quarter of the year. However, leading financial institutions such as BlackRock and Fidelity remain steadfast in their long-term vision. According to BlackRock, a 1–2% Bitcoin allocation in a portfolio is “reasonable” to hedge against macro risks.
Fidelity also predicted that countries, pension funds, and central banks will need to own Bitcoin to protect the value of their assets amid inflation risks and fiat currency devaluation.
Wide Impact on the Financial System
The growing interest of states and even the federal government in Bitcoin reserves represents a clear shift in thinking in the financial world. From a speculative asset, Bitcoin is shaping up to be part of the nation’s financial fabric.
Franklin Templeton believes that 2025 will see a shift from speculation to application, as blockchain technologies become core infrastructure in the financial sector.