- Arizona Governor Katie Hobbs vetoed two cryptocurrency-related bills, citing financial risk and market volatility.
- The governor blocked Senate Bill 1373, which aimed to create a reserve fund from seized crypto assets.
- Senate Bill 1024, which would have allowed state agencies to accept crypto payments for fines, was also rejected.
Arizona Governor Katie Hobbs vetoed two cryptocurrency-related bills this week, citing high risk and instability in the sector. The rejected bills aimed to integrate crypto assets more deeply into Arizona’s public finance system. However, the Governor emphasized the need to protect Arizona’s general fund from unpredictable crypto markets.
Arizona Governor Blocks Crypto Reserve Fund
Arizona lawmakers introduced Senate Bill 1373, which would establish a strategic reserve fund for the state’s seized cryptocurrency assets. The bill would liquidate seized digital assets to establish a financial reserve that could be drawn upon in future state demands. Hobbs, however, vetoed the bill, citing persisting volatility and exposure risks to Arizona’s main finances.
Despite passing bills permitting limited crypto use, Hobbs said that general funds should not be used in volatile assets. Earlier, she had passed laws that encouraged the use of digital assets without compromising state money. This bill would have directly tied Arizona’s reserves to crypto assets, which means Arizona would have had additional financial exposure.
Governor Hobbs determined that the proposed bill would not fit Arizona’s priorities for allocating funds and standards for taking risks. Her veto frustrated the establishment of any new reserve secured in seized cryptocurrency assets. This step is in line with her overall strategy of curbing crypto-associated activity in Arizona’s public financial affairs.
State Rejects Crypto for Government Payments
Arizona also wanted to enact Senate Bill 1024, to accept crypto for civil penalties and fines. The bill sought to increase forms of payment to allow Arizona state agencies to process digital currency during official transactions. However, Hobbs vetoed it, saying it has operational and financial risk for Arizona agencies.
The Governor expressed bipartisan concern about subjecting agencies to a highly unstable financial instrument like cryptocurrency. She outlined that attaching crypto to Arizona’s state departments’ daily operations may interfere with services. Consequently, state agencies will nevertheless use the old payment systems for penalties and fines.
This rejection is part of a broader trend of preventing the direct integration of crypto into the State of Arizona’s official financial mechanisms. Although there is a push for innovation, the administration has based its efforts on stability in state financial activities. Arizona critically measures the use of digital currencies, particularly when it concerns necessary public funds and services.
On the contrary, Arizona enacted House Bill 2387 to control crypto kiosks with strict consumer protection rules. The new law requires kiosk operators to display fraud warnings and get customer acknowledgment before transactions. It also imposes a $2000 daily limit on new users and requires 24/7 customer support.
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