In a significant move regarding cryptocurrency legislation, Governor Katie Hobbs of Arizona has vetoed a proposal aimed at establishing a state-run Bitcoin (BTC) Reserve using seized digital assets. This veto marks a continuing trend this legislative session, where several crypto-related bills have been dismissed by the governor.
Governor Hobbs Fails Bitcoin Reserve Legislation
On Tuesday, the governor made headlines by vetoing legislation that sought to amend existing forfeiture laws to incorporate digital currencies and create a Bitcoin Reserve from seized assets. This follows a recent revival of House Bill 2324 (HB 2324) by the Arizona State Senate.
Initially shelved after failing a House vote in May, the Senate’s reevaluation led to a passed vote with a majority of 34-22, pushing it back to the governor for approval. However, it was ultimately rejected, becoming the third proposal related to a Bitcoin Reserve to meet this fate in recent weeks.
In her decision announced on July 1, Governor Hobbs expressed concerns that HB 2324 would complicate local law enforcement’s cooperation with state authorities in managing asset forfeiture, particularly by centralizing seized digital assets away from local jurisdictions.
The proposed law aimed to modernize Arizona’s asset forfeiture framework by integrating digital assets, providing clarity on regulations surrounding seizure, custody, and allocation of cryptocurrencies, and safeguarding innocent property owners.
Moreover, the bill envisioned the creation of a comprehensive “Bitcoin and Digital Assets Reserve Fund” to handle crypto seized through criminal activities. Its reintroduction followed the enactment of House Bill 2749 (HB 2749), which previously allowed the state to manage unclaimed cryptocurrencies.
House Bill 2749 effectively marked the state’s first legitimate reserve for cryptocurrencies, enabling authorities to retain unclaimed digital assets without relying on taxpayer money. However, the governor’s decisions have cast doubt on the state’s commitment to embracing cryptocurrency.
Despite signing House Bill 2749, her rejection of additional crypto proposals suggests a cautious approach towards integrating digital currencies into state financial practices, citing the unpredictability and volatility associated with such assets.
Connecticut Implements Bitcoin Reserve Ban
In a parallel move, Connecticut’s Governor Ned Lamont has enacted a ban on Bitcoin reserves in the state. Set to take effect on October 1, this legislation will prohibit any state agencies from accepting, holding, or investing in cryptocurrency assets.
Under House Bill 7082 (HB 7082), titled “An Act Concerning Various Revisions to the Money Transmission Statutes, State Payments, and Investments in Virtual Currency,” both legislative chambers unanimously approved the bill in mid-June. This statute enhances Connecticut’s regulatory framework for digital assets, consolidating definitions and introducing stringent compliance protocols.
Key amendments focus on bolstering oversight of entities engaged in money transmission involving cryptocurrency, emphasizing licensing and transparency. Noteworthy is the explicit clause banning the establishment of any virtual currency reserves by the state or its subdivisions.
