Arizona won’t become the next major player in the cryptocurrency industry after Gov. Katie Hobbs vetoed three virtual currency bills, but a new law Hobbs did sign will establish the state’s first fund for unclaimed digital assets.
Rep. Jeff Weninger’s House Bill 2749, which Hobbs signed on May 12, will require the state to hold onto unclaimed digital currency, such as Bitcoin, for three years before liquidating it.
Weninger, a Chandler Republican, said the law is needed, because under current law, those unclaimed digital assets are liquidated for cash before they are turned over to the state, meaning they won’t appreciate if the value of a specific currency increases.
“We just think that’s problematic,” Weninger said. “If you had liquidated, if this had happened three years ago and somebody had one Bitcoin, they would have like [$15,000] … and they come and claim it today and they’re like, ‘wait a minute, one Bitcoin is $100,000.”
The cryptocurrency market is extremely volatile. Bitcoin, for instance, has risen in value from around $1,200 in January 2017 to over $100,000 today. During that time, however, the cryptocurrency’s value has fluctuated up and down, dropping $50,000 between October 2021 and October 2022 before restarting an upward trajectory.
The law also created the Bitcoin and Digital Assets Reserve Fund to hold onto any currency that remains unclaimed after three years and interest earned on those assets. It also requires the state treasurer to deposit 10% of the fund into the state’s general fund, which pays for most state functions and services, from public education to health services.
The bill is similar to a New York law passed in 2022 that added to its abandoned property law. The New York statute requires unclaimed crypto to be held for five years before it is considered abandoned, and the state expects the first report on abandoned cryptocurrency in November 2027.
An Arizona Department of Revenue spokesperson did not respond to a request to provide records related to any current revenue held by the state that were derived from abandoned cryptocurrency.
Though Hobbs signed Weninger’s bill, she vetoed other, more aggressive cryptocurrency bills.
A breakdown of the Arizona House and Senate bills Arizona Gov. Katie Hobbs vetoed so far in 2025.
“I mean, does anyone really understand Bitcoin?” Hobbs laughed when asked about some of those bills days before she vetoed Senate Bill 1025, which would have allowed the state treasurer and state employee retirement funds to invest up to 10% of the funds they control in virtual currencies.
Sen. Wendy Rogers (R-Flagstaff), who sponsored the bill, said the legislation is needed to provide alternative investment options for the state as a “hedge against inflation.”
“So this legislation empowers state treasurers and pension funds to diversify investments by incorporating assets that preserve purchasing power, such as Bitcoin, which is a proven hedge against inflation,” Rogers said.
In a veto letter, Hobbs said the Arizona State Retirement System is already “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,” she wrote.
Hobbs took a similar position when she vetoed Sen. Mark Finchem’s SB 1373 about a week later. It would have created a Digital Assets Strategic Reserve Fund using money appropriated by the legislation and digital assets seized by the state. It would also allow the state treasurer to invest up to 10% of that money annually and make loans from the fund.
“It simply expands the toolbox, if you will, of the state treasurer to protect the financial interests of the people of Arizona,” Finchem said.
But, again, Hobbs said the bill was too risky, arguing volatility in the cryptocurrency market “does not make it a prudent fit” for state dollars.
“I have already signed legislation this session which allows the state to utilize cryptocurrency without placing general fund dollars at risk, which is the responsible path to take,” Hobbs wrote, likely referencing Weninger’s bill that she signed into law.
Even that more modest bill makes Arizona one of the first states to officially venture into the world of digital currencies following New York and New Hampshire, which passed a more aggressive law allowing the state to invest in cryptocurrencies.
Jimmy Vielkind with WNYC contributed to this report.
EDITOR’S NOTE: This story has been updated to correct the sponsor of a cryptocurrency bill signed by Gov. Katie Hobbs.
