The bill defines “virtual currency” as “a digital representation of value that functions as a medium of exchange, a unit of account and a store of value other than a representation of the U.S. dollar or a foreign currency,” according to the state Senate’s research office.
The bill passed both houses of the Arizona Legislature before being sent to the desk of Gov. Katie Hobbs (D), but she ultimately found the bill too risky.
“Today, I vetoed Senate Bill 1025,” Hobbs wrote last week in a letter to Warren Petersen, president of the state Senate. “The Arizona State Retirement System is one of the strongest in the nation because it makes sound and informed investments. Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”
The bill was sponsored by two Republican lawmakers, Sen. Wendy Rogers and Rep. Jeff Weninger. The decision was blasted by cryptocurrency advocates, some of whom claimed that shortfalls in the state’s pension system could have benefited from involvement in cryptocurrency.
In March, President Donald Trump ordered the creation of a strategic Bitcoin reserve and U.S. digital asset stockpile. But the use of cryptocurrency is seen as risky by some.
Reports emerged earlier this year suggesting that the U.S. Department of Housing and Urban Development (HUD) was considering the deployment of cryptocurrency and blockchain technology to track agency grants. Democrats slammed the idea even as HUD said that the “department has no plans for blockchain or stablecoin.”
Prior to the inauguration of President Donald Trump, the Government Accountability Office (GAO) issued a report late last year in which it explained that “GAO’s analysis of investment returns indicates crypto assets have uniquely high volatility — a measure of their riskiness to participants — and their returns can come with considerable risk.”
