TLDR
Arizona Governor vetoes bill to create a state-managed crypto reserve fund.
Arizona’s veto blocks a plan to diversify state investments with crypto.
Arizona’s crypto efforts continue, with laws like HB 2749 on unclaimed assets.
Texas and New Hampshire push forward with state-run crypto reserve funds.
Arizona Governor Katie Hobbs has vetoed House Bill 2324, a legislative proposal aimed at creating a reserve fund to manage cryptocurrency assets seized through criminal forfeiture. The bill, which passed the Arizona House of Representatives in a 34-22 vote, proposed the creation of a Bitcoin and Digital Assets Reserve Fund.
This fund would have been managed by the state treasurer and would have overseen digital assets obtained through criminal forfeiture. The move to establish this fund was intended to help the state invest in and manage these assets.
Governor Hobbs’ Reasons for Vetoing the Bill
In her veto letter, Governor Hobbs outlined her concerns regarding the bill’s potential consequences. She stated that the bill could “disincentivize local law enforcement from working with the state on digital asset forfeiture” by removing seized assets from local jurisdictions. According to Hobbs, the bill would complicate the process of asset allocation for local law enforcement agencies.
By transferring seized crypto assets to the state, the bill could have undermined local efforts to manage such assets. She also expressed concerns that the measure would potentially hinder cooperation between local and state law enforcement agencies on digital asset forfeiture.
The Governor’s veto came after a series of debates in the Arizona legislature. While the Arizona House of Representatives approved the bill in late June, the measure was revived in the state Senate before reaching Hobbs’ desk. Despite the approval, the veto blocks the bill’s implementation, which would have granted the State Treasurer the authority to manage crypto assets obtained through criminal forfeiture.
Details of HB 2324 and Its Provisions
House Bill 2324 proposed that any seized crypto assets be managed by the state through the newly established Bitcoin and Digital Assets Reserve Fund. The bill detailed how proceeds from criminal forfeiture would be divided.
The first $300,000 from seized crypto would have gone to the Attorney General’s office. Any amount exceeding that would have been split, with 50% allocated to the Attorney General, 25% to the state general fund, and 25% designated for the reserve fund.
The bill also proposed that the state could use the reserve fund to invest in cryptocurrency or exchange-traded funds (ETFs) containing digital assets. This would have allowed Arizona to diversify its financial holdings by including cryptocurrency as part of its investment strategy. If approved, this legislation would have positioned Arizona as one of the few states to stockpile cryptocurrency as part of its financial assets.
Arizona’s Crypto Legislative Landscape
While Governor Hobbs has vetoed HB 2324, the state has made progress in integrating cryptocurrency into its financial framework. Arizona passed House Bill 2749 earlier this year, which allows the state to manage unclaimed crypto assets presumed abandoned. This law has made Arizona the second state in the U.S. to create a crypto reserve focused on unclaimed digital assets.
In addition to HB 2749, Arizona is considering other crypto-related legislation. Senate Bill 1062, for instance, expands the definition of legal tender in the state to include cryptocurrency. This ongoing focus on cryptocurrency legislation demonstrates Arizona’s efforts to adapt to the growing influence of digital assets in the financial landscape.
Other States Pursuing Crypto Reserve Funds
Arizona’s decision to veto HB 2324 is part of a larger trend among U.S. states considering the creation of crypto reserve funds. Texas recently passed legislation to create the Texas Strategic Bitcoin Reserve, which will manage Bitcoin as part of the state’s long-term financial assets. New Hampshire has also enacted similar legislation that allows the state to invest in cryptocurrencies, alongside precious metals.
As of now, several other states have introduced bills related to cryptocurrency reserves. These efforts are part of a broader initiative to incorporate digital assets into state-managed financial portfolios. The growing number of states exploring cryptocurrency legislation reflects the increasing interest in digital assets at both state and federal levels.
Despite the veto, Arizona remains active in the conversation around cryptocurrency and digital asset management, as evidenced by its ongoing legislative efforts to address the evolving role of digital currencies.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
