Arizona governor vetoes two crypto bills, approves new Bitcoin ATM regulations

Key Takeaways

Two crypto bills, Senate Bill 1373 and Senate Bill 1024, are dead after the governor’s action.
A budget-neutral approach in House Bill 2749 was favored by Hobbs for managing Bitcoin reserves through airdrops and staking.

Arizona Governor Katie Hobbs on Monday vetoed Senate Bill 1373 (SB1373), which proposed establishing a Digital Assets Strategic Reserve Fund to manage and invest in state-held digital assets, according to the state’s bill tracking system.

Introduced in February, SB1373 would have authorized the state to manage crypto assets obtained through seizures or legislative appropriations, with specific provisions for custody, investment, and lending.

Under the proposed legislation, the state treasurer would have been permitted to invest up to 10% of the fund’s total deposits in any fiscal year.

In her veto letter to Senate President Warren Petersen, first obtained by Decrypt, Governor Hobbs cited ongoing volatility in crypto markets as a key reason for rejecting the bill.

She also noted that earlier in the session, she had already signed legislation enabling the state to engage with digital assets in ways that do not put taxpayer funds at risk.

The bill Hobbs referenced is House Bill 2749 (HB2749), which is set to establish a reserve fund for Bitcoin and other digital assets acquired through airdrops, staking rewards, and interest. She signed it into law on May 7.

Dennis Porter, CEO of the Satoshi Action Fund, previously noted that Hobbs favored HB2749 over other crypto-related proposals due to its budget-neutral structure.

Also on Monday, Hobbs vetoed Senate Bill 1024 (SB1024), which would have allowed state agencies to accept crypto payments for taxes, fines, fees, rent, and penalties.

“Today, I vetoed Senate Bill 1024. While this bill would allow state agencies to enter into agreements to protect the state from risks associated with cryptocurrency, legislators on both sides of the aisle acknowledged it still leaves the door open for too much risk,” Hobbs said in her veto message.

These decisions follow her earlier rejection of Senate Bill 1025 (SB1025), which sought to authorize state officials to invest up to 10% of treasury and pension assets in digital assets.

At least one measure made it through on Monday. House Bill 2387 (HB2387), which establishes consumer protection rules for crypto kiosks (ATMs) in Arizona, successfully secured the governor’s nod.

Under the new law, operators are required to provide fraud warnings, detailed transaction receipts, and 24/7 customer support.

It also sets daily transaction limits of $2,000 for new customers and $10,500 for existing ones, while mandating the use of blockchain analytics to block known scam wallets.