Democratic Governor Katie Hobbs of Arizona has recently vetoed a senate bill aiming to make the state a pioneer in adopting a State Bitcoin Reserve. The proposed legislation, named the Arizona Strategic Bitcoin Reserve Act, sought to enable the state treasurer and retirement systems to invest up to 10% of public funds in Bitcoin.
Hobbs justified her decision as a crucial effort to protect public retirement interests, highlighting concerns surrounding the volatility associated with cryptocurrencies. In her official letter addressing Senate President Warren Peterson, she pointed out that the Arizona State Retirement System’s current robustness stems from a history of prudent investments.
> “Arizona’s retirement funds are not the place for the state to try untested investments like virtual currency.”
> — Katie Hobbs, Governor of Arizona
The veto has ignited considerable backlash, particularly among Republican legislators and the cryptocurrency community. Senator Wendy Rogers, who championed the bill, lamented the veto as ‘unfortunate’ and committed to refiling the legislation in the next session, asserting that “Bitcoin doesn’t need Arizona. Arizona needs Bitcoin.”
Investor Anthony Pompliano also publicly criticized Governor Hobbs’ decision on social media, questioning her understanding of the cryptocurrency space and her capacity to make informed policy decisions.
Hobbs’ veto notably contrasts with a recent initiative from former President Donald Trump, who, in March, signed an executive order to establish a national Bitcoin Reserve. This directive proposed the creation of a Strategic Bitcoin Reserve at the federal level, enabling the country to accrue cryptocurrency assets without additional financial burden to taxpayers.
In a broader context, the sentiment regarding cryptocurrency investment is echoed in Australia. Following Trump’s announcement of establishing a national Bitcoin Reserve, a spokesperson for the Australian government affirmed that there are currently no intentions to invest in cryptocurrencies at the national level. Although the government recognises the potential of digital assets to benefit the economy and spur innovation, it prefers a cautious approach. They emphasise collaboration with regulatory bodies to develop an effective digital asset regulatory framework that ensures transparency, safeguards investors, and mitigates inherent risks within the cryptocurrency market.
This scenario illustrates a fundamental reluctance among US states and international governments alike to fully embrace cryptocurrency investments in public funds, reflective of a broader hesitation towards untested financial instruments amidst market volatility.
As the debate unfolds, it remains to be seen whether cryptocurrency will gain a more significant footing in the financial systems of states like Arizona or nations like Australia.
