Governor Katie Hobbs of Arizona has vetoed a bill that aimed to establish a state-managed Bitcoin reserve using cryptocurrencies seized from criminal activities. The bill passed the Arizona House but was vetoed over concerns it would discourage local law enforcement from cooperating on digital asset forfeiture.

It marks Hobbs' third veto on Bitcoin-related legislation. Earlier this year, she vetoed bills letting state funds invest in Bitcoin and allowing agencies to accept crypto for fines and taxes.

Hobbs has consistently expressed caution due to the volatility of cryptocurrency markets, stating that such fluctuations make it unwise to allocate general fund dollars to crypto.

Despite her vetoes, Hobbs did approve legislation permitting the state to hold unclaimed cryptocurrencies in their native form rather than converting them to cash. While states like Texas and New Hampshire have embraced Bitcoin reserves, Arizona continues to exercise strict oversight.

Experts suggest future governors may take a different approach, potentially opening the door to more crypto-friendly policies.