Arizona Governor blocks bill to create crypto reserve fund from seized assets – Here’s why

• Arizona Governor blocks HB 2324, halting plans to establish a state-managed cryptocurrency reserve fund.
• Third Bitcoin-related veto highlights Arizona’s cautious stance on crypto in public finance.

Just days ago, Arizona’s Senate advanced House Bill 2324, an initiative aimed at establishing a state-level reserve fund for cryptocurrencies seized through criminal forfeiture.

Initially sidelined, the bill found new life through strategic legislative maneuvers but met a firm roadblock at the governor’s desk.

Governor Katie Hobbs vetoes House Bill 2324

Governor Katie Hobbs firmly rejected the proposal, stating it would undermine collaboration with local law enforcement by stripping them of control over seized digital assets.

She noted, 

“Today, I vetoed House Bill 2324. This bill disincentives local law enforcement from working with the state on digital asset forfeiture by removing seized assets from local jurisdictions.”

Despite its recent 34-22 approval in the House, the bill’s rejection highlights ongoing tensions around digital asset governance and inter-agency cooperation.

For those unaware, House Bill 2324 aimed to let Arizona’s State Treasurer set up a “Bitcoin and Digital Assets Reserve Fund” to manage crypto assets seized from criminal activities.

Had it been approved, the measure would have enabled the state to invest, reinvest, or divest such assets, including through digital asset ETFs.

However, the plan hit a major roadblock with Governor Katie Hobbs’ veto.

While lawmakers technically retain the option to override her decision, doing so would require a two-thirds majority in both chambers, an outcome that seems unlikely without a shift in legislative support.

Governor Hobbs’ veto history

This marked Governor Katie Hobbs’ third veto of Bitcoin [BTC]-related legislation, reaffirming Arizona’s cautious stance on crypto exposure in public finance.

In May, she also vetoed proposals that would have allowed state treasurers and retirement systems to allocate up to 10% of funds into Bitcoin and retain seized cryptocurrency.

However, amid multiple rejections, she has approved House Bill 2749, which allows the state to hold unclaimed crypto in its original form, indicating a more nuanced stance rather than outright opposition.

Therefore, in conclusion, while Texas and New Hampshire continue to establish dedicated Bitcoin reserves, Arizona is maintaining strict regulatory oversight.

Still, experts like Pranav Agarwal, independent director at Jetking Infotrain India, believe these legislative roadblocks are unlikely to halt the state’s evolving approach to digital assets.