Nikolas Sargeant
Arizona Governor Katie Hobbs has vetoed the Strategic Bitcoin Reserve Act, a bill that would have permitted the state to invest seized funds into Bitcoin and create a reserve managed by state officials. In her veto letter, Hobbs emphasized that the bill broadly defined "blockchain technology" and would have prevented local policymaking concerning an emergent and potentially energy-intensive economic activity.
The veto has sparked criticism from Bitcoin advocates, including State Senator Wendy Rogers, who co-sponsored the bill. Rogers argued that "Bitcoin doesn’t need Arizona, Arizona needs Bitcoin," highlighting the missed opportunity for the state to embrace a growing economic sector.
Despite the setback, Rogers has vowed to reintroduce the bill in the next legislative session. She pointed out that Arizona's state retirement system already holds stocks of Michael Saylor’s Strategy, which is essentially a leveraged Bitcoin ETF, suggesting that the state is already indirectly invested in Bitcoin.
Other States Exploring Bitcoin Reserves
While Arizona has taken a step back, several other U.S. states are advancing legislation to establish Bitcoin reserves. Texas, for instance, has introduced Senate Bill 21, which seeks to create the Texas Strategic Bitcoin Reserve. The bill has passed the Senate Committee on Business and Commerce and is awaiting a vote on the Senate floor. If enacted, it would allow the state to acquire and hold Bitcoin as a hedge against inflation and economic volatility.
Similarly, Florida is considering legislation that would permit the state to invest in Bitcoin and other digital assets. The proposed bill aims to diversify the state's investment portfolio and reduce reliance on traditional financial instruments.
These initiatives reflect a growing recognition of Bitcoin's potential as a store of value and a tool for financial diversification. However, they also raise questions about the risks associated with investing public funds in a volatile asset. As more states consider similar measures, the debate over the role of cryptocurrencies in state finances is likely to intensify.
