In a surprising turn of events, Arizona Governor Katie Hobbs has taken a cautious step back from crypto-forward legislation, vetoing key Bitcoin bills just days after signing a promising digital asset law.

While the approval of House Bill 2749 sparked optimism that Arizona could be warming up to crypto innovation, her recent actions suggest a more measured approach to digital asset adoption — one that emphasizes consumer protection and fiscal conservatism over market speculation.

Just last week, Hobbs signed HB 2749, a bill updating the state’s unclaimed property laws to include digital assets. The move led many in the crypto space to believe she might also approve Senate Bill 1373, which would have authorized Arizona’s treasurer to allocate up to 10% of the state’s Budget Stabilization Fund into Bitcoin.

But those hopes were dashed this week as Hobbs opted for a more restrained strategy when it comes to state-level crypto adoption.

Arizona Taking a Budget-Neutral Stance

Despite the pro-crypto tone of HB 2749, Hobbs made it clear that her administration is not ready to put taxpayer-backed funds at risk.

On Monday, she officially vetoed Senate Bill 1373, which sought to create a Digital Assets Strategic Reserve Fund that would hold and manage cryptocurrencies seized by law enforcement or allocated by the legislature.

In her veto statement, Hobbs cited the ongoing volatility in cryptocurrency markets, declaring such assets "not a prudent fit for general fund dollars."

She emphasized that while Arizona can explore crypto in budget-neutral ways, speculative use of state reserves is off the table:

“I have already signed legislation this session which allows the state to utilize cryptocurrency without placing general fund dollars at risk.”

Hobbs also rejected Senate Bill 1024, which would have permitted Arizona residents to pay taxes, fees, and fines in cryptocurrency via approved payment providers — another setback for crypto integration at the state level.

One step forward, two steps back

Even with these vetoes, Arizona isn't turning its back on digital assets entirely. On the same day she blocked SB 1373, Governor Hobbs signed House Bill 2387 into law — a bill aimed at improving consumer protections for users of Bitcoin ATMs and crypto kiosks across the state.

The new legislature demands kiosks display clear, multilingual warnings about common crypto scams and require users to acknowledge these risks before completing transactions. It also mandates operators to provide detailed receipts that include transaction data, contact information, fees, and refund policies.

The bill also limits the transactions to $2,000 per day for new customers and $10,500 per day for returning users after 10 days.

Kiosk providers must also offer 24/7 toll-free customer service and post the number visibly on each machine.

Under the bill, new users are also entitled to a full refund if they report and provide proof that they were scammed within 30 days. There are currently 20 active Bitcoin ATMs in Arizona.

A People's First Solution

Governor Hobbs’ latest decisions reflect a balancing act between embracing innovation and protecting public resources.

While vetoing strategic investment and crypto payment bills may disappoint industry advocates, the signing of HB 2387 and HB 2749 suggests Arizona is not anti-crypto — just cautiously pro-consumer.

As other states explore Bitcoin reserves and blockchain-based payments, Arizona appears focused on responsible crypto infrastructure that doesn't jeopardize fiscal stability.