Arizona Governor Katie Hobbs has effectively halted efforts to integrate digital assets into the state's public financial system by vetoing two cryptocurrency-related bills, Senate Bill 1373 and Senate Bill 1024.
However, the governor's decision was accompanied by the signing of House Bill 2387, which introduces regulations for cryptocurrency kiosk operators to enhance consumer protection and deter fraud.
Governor Katie Hobbs Vetoes Two Senate Cryptocurrency Bills
Senate Bill 1373, sponsored by Senator Mark Finchem, proposed establishing a digital asset strategic reserve to be managed by the state treasurer.
The reserve would consist of allocated funds and seized digital assets. The treasurer would have the authority to deposit assets in secure custody solutions or exchange-traded products.
The bill would also allow the treasurer to invest up to 10% of funds annually and lend digital assets to generate revenue, while minimizing financial risks to the state.
However, Governor Hobbs rejected the bill, citing that similar legislation had already been passed into law. Last week, BeInCrypto reported that Hobbs signed HB 2749.
This bill allows the state to own abandoned digital assets if the owner does not respond within three years.
"The current volatility of the cryptocurrency market is not suitable for general fund dollars. I have already signed legislation this session that allows the state to utilize cryptocurrency without putting general fund dollars at risk. This is a responsible path," Hobbs said.
This reason aligns with the previous rejection of SB 1025 on May 2nd, which proposed creating an Arizona Strategic Bitcoin Reserve.
Meanwhile, SB 1024, sponsored by Senator Wendy Rogers and Representative Jeff Weninger, aimed to allow state agencies to accept cryptocurrency for payments, including fines, taxes, and fees.
The bill would have permitted agencies to contract with cryptocurrency service providers, set transaction terms, and clarify payment responsibilities. However, the Arizona governor rejected it again.
"While this bill would allow state agencies to enter into contracts to protect the state from cryptocurrency-related risks, bipartisan legislators acknowledged that it still leaves the door open to too many risks," the veto letter states.
Notably, Hobbs vetoed 36 bills on Monday. Nevertheless, one cryptocurrency bill, HB 2387, received her approval. This bill requires cryptocurrency kiosk operators to provide clear notices in multiple languages, obtain verification, and issue detailed receipts after each transaction.
The bill requires the use of blockchain analytics to prevent fraud and mandates that operators maintain a written anti-fraud policy. It also ensures 24-hour customer service.
The bill sets a daily transaction limit of $2,000 for new customers and adjusts the limit for existing customers from $5,000 to $10,500.
Additionally, operators must provide full refunds for fraudulent transactions reported within 30 days, subject to law enforcement verification.
