Arizona Governor Katie Hobbs has struck down a bill that would have allowed the state to establish a Bitcoin reserve and invest taxpayers’ money in Bitcoin and other cryptocurrencies. However, despite this, Hobbs has since gone on to sign HB 2749, which means the Grand Canyon State is only the second, after New Hampshire, that will be able to retain seized cryptocurrency to create a state reserve. The bill also allows the seized assets to be used for staking rewards and airdrops, thereby increasing the size of the reserve.
Bitcoin’s Popularity
Bitcoin has become popular for e-commerce, gaming, and especially for sports betting and iGaming websites. Its speed, privacy, and low-cost transactions appeal to consumers as well as to the sites that accept it, according to industry insights and, according to online casino expert Wilna van Wyk, in the case of casino withdrawals, this enables players to access their winnings within minutes.
Investment Potential
Bitcoin is also popular as a store of value, and with investors looking to speculate on the volatility of the cryptocurrency market. However, Arizona Governor Katie Hobbs does not believe that Bitcoin’s level of volatility is good for pension investment funds.
Not In Arizona
Striking down a proposed bill that would have allowed the state’s pension fund manager to invest in Bitcoin and similar cryptocurrencies, she said: “The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed decisions. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”
A Volatile Investment
Ever since President Donald Trump mooted the idea of a national strategic Bitcoin reserve, states have been scrambling to try and get ahead of the potential changes. However, despite numerous mentions of such reserves, very little has really materialized.
States are naturally wary of the level of volatility that assets like Bitcoin experience. It isn’t unusual for BTC to see price increases and decreases of 10% or more in a day, which could see pension funds take considerable hits.
Opposition To Hobbs’s Decision
However, not everybody in Arizona agrees with Hobbs’s decision. Republican senator Wendy Rogers implored Hobbs to sign the agreement, saying: “Crypto and Bitcoin have a huge following nationwide and in Arizona. They are wildly popular with the youth and independents. I certainly hope she signs it, because she can take credit and it will make her look good.”
After Hobbs struck the deal down, Rogers took to Twitter and said, “Politicians don’t understand that Bitcoin doesn’t need Arizona. Arizona needs Bitcoin.”
Positive Arizonan Bitcoin Moves
Having prioritized economic development in her recent budget, though, Hobbs hasn’t completely turned her back on Bitcoin, taking a more cautious approach. Hobbs signed House Bill 2759 in May – a bill that enables the state to take ownership of seized and abandoned digital assets if no claim is made on the assets within three years.
Previously, the state was unable to hold these reserves and would be forced to sell any such assets on the open market. Now, however, Arizona will not only be able to hold the currencies as a reserve but will be able to benefit from staking and airdrop bonuses, which could potentially see the cryptocurrency coffers swell in the coming years.
Following New Hampshire
Arizona became the second state to sign similar legislation, passing the new bill just days after New Hampshire Governor Kelly Ayotte signed House Bill 302. New Hampshire’s bill was much more comprehensive than Arizona’s because it enables the state to invest 5% of state funds in Bitcoin and other digital assets, as well as precious metals.
The Future Of Crypto In Arizona And The US
Crypto enthusiasts within the state are also waiting for Hobbs to decide whether to pass Senate Bill 1373. That bill would enable up to 10% of Arizona’s Budget Stabilization Fund to be assigned to Bitcoin and digital assets.
Although the moves by Arizona are seen as being somewhat muted compared to New Hampshire, the bills are seen as being positive signs for the future of Bitcoin because if states and the federal government start to hold and eventually invest in Bitcoin, it will likely lead to considerably more money flowing into the crypto market.
