In a significant move impacting the future of digital asset policy in the United States, Arizona Governor Katie Hobbs has vetoed House Bill 2324 (HB 2324), a legislative effort aimed at establishing a state-managed cryptocurrency reserve fund composed of cryptocurrencies seized during criminal proceedings.
The decision, announced on Tuesday, halts Arizona’s attempt to centralize control over confiscated digital assets under the authority of the State Treasurer, marking a setback for proponents of state-level bitcoin and crypto reserves.
Why Did Governor Hobbs Veto HB 2324?
In her official veto letter, Governor Hobbs expressed concern that transferring control of seized crypto assets from local law enforcement jurisdictions to the state level could undermine cooperation between agencies. She argued that local prosecutors and sheriffs might be less inclined to pursue digital asset seizures if they knew the financial benefits—such as asset liquidation proceeds—would no longer directly support their departments.
“Shifting control of these assets away from local jurisdictions may disincentivize local law enforcement from participating in complex digital asset forfeiture cases,” Hobbs stated.
This rationale underscores an ongoing tension in U.S. crypto policy: balancing centralized fiscal strategy with decentralized law enforcement incentives.
👉 Discover how governments are navigating digital asset strategies in 2025.
What Was HB 2324 Supposed to Do?
HB 2324 was designed to create a strategic digital asset reserve managed by Arizona’s State Treasurer. Key provisions included:
- Centralizing all cryptocurrencies seized through criminal forfeiture into a single state-controlled fund.
- Allowing the state to invest or trade these assets, including allocating funds to exchange-traded funds (ETFs) that hold digital assets.
- Establishing a formal mechanism for managing and potentially growing the value of confiscated crypto over time.
The bill passed the Arizona House last week by a narrow margin—34 votes in favor, 22 opposed—highlighting deep legislative division over the role of government in crypto asset management.
Context: Arizona’s Broader Crypto Legislative Agenda
This veto comes shortly after Arizona made headlines in early May by passing HB 2749, becoming the second U.S. state (after Texas) to enact legislation related to state-held cryptocurrency reserves.
However, there's a crucial distinction:
- HB 2749 focuses on unclaimed or abandoned digital assets, such as dormant wallets or inheritances with no clear owner.
- HB 2324, now vetoed, targeted cryptocurrencies seized from criminal activity, representing a more aggressive fiscal and law enforcement integration strategy.
Despite the veto, Arizona remains active in shaping crypto policy. Lawmakers are currently reviewing other proposals, including SB 1062, which seeks to recognize cryptocurrency as legal tender within the state—a bold step toward mainstream adoption.
National Trends: A Divided Approach to State Bitcoin Reserves
Arizona’s stalled effort reflects a broader national divergence in how U.S. states are approaching strategic bitcoin holdings.
States That Have Abandoned Reserve Plans
In recent months, several states have dropped similar initiatives:
- Florida became the latest to abandon its proposal in May.
- Others include Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma, all of which previously explored but ultimately halted plans for state bitcoin reserves.
Critics cite volatility, regulatory uncertainty, and fiduciary responsibility concerns as key reasons for hesitation.
The Texas Precedent: A Model for Pro-Crypto States
Contrastingly, Texas has emerged as a leader in pro-crypto fiscal policy. Last month, Governor Greg Abbott signed Senate Bill 21 (SB 21) into law, creating the first state-funded bitcoin reserve in U.S. history.
Unlike Arizona’s centralized model, Texas’ fund is:
- Independent of the state treasury
- Overseen by the Texas Comptroller Glenn Hegar
- Designed to evaluate bitcoin as a strategic asset class
Senator Charles Schwertner, the bill’s sponsor, emphasized long-term value:
“We can buy land, we can buy gold—why shouldn’t Texas have the right to assess the best-performing asset of the past decade?”
This innovative approach may inspire other states to revisit their own reserve strategies.
👉 See how institutional investors are treating bitcoin as a strategic reserve asset.
Corporate Bitcoin Adoption Accelerates Globally
While state-level initiatives face political hurdles, private sector adoption of bitcoin as a treasury reserve is accelerating rapidly.
United Kingdom: A Surge in Corporate BTC Purchases
Over the past week alone, at least nine UK-based companies have announced plans to acquire bitcoin or revealed recent purchases for corporate balance sheets. Notable examples include:
- Tao Alpha, an AI services provider, which plans to raise £100 million following investor interest in its bitcoin treasury strategy.
- Smarter Web Company, a small web design firm whose market cap surged from £4 million to over £1 billion within two months after announcing a BTC purchase—though it has since corrected.
U.S. and Global Moves
- In the U.S., Anthony Pompliano’s ProCap BTC acquired 3,724 bitcoins worth $386 million as part of a SPAC merger strategy.
- In Japan, Metaplanet launched its ambitious “5.55 Billion Yen Plan,” raising ¥76 billion ($517.8 million) on day one, aiming to hold 210,000 BTC by 2027.
These moves signal growing confidence among corporations in bitcoin’s long-term store-of-value proposition.
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Frequently Asked Questions (FAQ)
Q: What is HB 2324?
A: HB 2324 was an Arizona bill that aimed to create a state-managed fund for cryptocurrencies seized during criminal investigations. It would have given the State Treasurer authority to invest and manage these assets. The bill was vetoed by Governor Katie Hobbs.
Q: Why did Arizona reject the crypto reserve bill?
A: Governor Hobbs vetoed HB 2324 because she believes centralizing seized crypto assets at the state level could discourage local law enforcement from pursuing digital asset forfeiture cases due to loss of financial incentives.
Q: Which U.S. state has successfully passed a bitcoin reserve law?
A: Texas became the first U.S. state to establish a government-funded bitcoin reserve through Senate Bill 21 (SB 21), signed into law by Governor Greg Abbott in June 2025.
Q: Can states legally hold bitcoin?
A: Yes—there is no federal prohibition against states holding bitcoin. However, legal frameworks vary, and some states require specific legislation to authorize such holdings for fiscal or investment purposes.
Q: What’s the difference between HB 2324 and HB 2749 in Arizona?
A: HB 2324 dealt with cryptocurrencies seized from criminal activity, while HB 2749 addresses unclaimed or abandoned digital assets. Only HB 2749 remains active after the HB 2324 veto.
Q: Are companies really buying bitcoin for their treasuries?
A: Yes—companies like MicroStrategy, ProCap BTC, and Metaplanet are actively allocating capital to bitcoin as a long-term treasury reserve asset, citing inflation protection and historical performance.
👉 Learn how institutions are building bitcoin reserves today.
Final Thoughts
The veto of HB 2324 marks a pivotal moment in Arizona’s evolving relationship with digital assets. While the state continues to explore innovative crypto policies—such as recognizing crypto as legal tender and managing unclaimed assets—it has drawn a line at centralizing forfeited crypto under state control.
Meanwhile, Texas’ groundbreaking move sets a new precedent for how governments can treat bitcoin not just as a commodity, but as a strategic financial asset. As corporate adoption accelerates globally, the pressure may grow for more states to reconsider their stance—balancing fiscal innovation with public accountability.
One thing is clear: the debate over who should hold bitcoin—the government or the market—is far from over.