Arizona SB 1025: the Bitcoin reserve bill that passed both chambers but was vetoed in 2025. What happened, what proponents are doing next, and how AZ compares to other states.
Arizona came closer than any US state to holding Bitcoin in a state reserve. In 2025, the Arizona legislature passed SB 1025 — the Bitcoin and Digital Assets Reserve Fund bill — through both chambers with bipartisan support. Governor Katie Hobbs vetoed it.
In 2026, Arizona legislators are trying again. The Arizona Bitcoin & Digital Assets Reserve Fund remains one of the most active Bitcoin policy battlegrounds in the US.
SB 1025, sponsored by Senator Wendy Rogers, would have allowed Arizona to invest up to 10% of state funds (Treasury and pension funds) in Bitcoin and other digital assets. The bill established a "Bitcoin and Digital Assets Reserve Fund" to hold these assets.
Key provisions:
The bill passed the Arizona Senate 16-13 and the House 31-25. This bipartisan margin was notable — Bitcoin legislation typically struggles to get through any chamber, let alone both with votes to spare.
Governor Katie Hobbs (Democrat) vetoed SB 1025 in May 2025. Her stated reasons:
Hobbs specifically cited concerns about pension fund beneficiaries — teachers, police, and state workers whose retirement security could theoretically be affected.
Bill supporters pushed back on each veto rationale:
On volatility: The 10% cap was specifically designed to limit exposure. A 70% Bitcoin drawdown would reduce state reserves by at most 7% — a meaningful but not catastrophic impact, and one cushioned by the upside potential.
On fiduciary duty: Several legal scholars argued that Bitcoin's track record, market cap, and institutional adoption by 2025 made it a legitimate institutional-grade asset. MicroStrategy's institutional playbook demonstrated the viability.
On regulatory clarity: The Bitcoin spot ETF approvals (January 2024) and FASB accounting rule changes (2024) provided the institutional framework proponents argued was necessary.
On precedent: El Salvador and several countries had proven the concept at a national level.
Arizona's bill went further than any other state in 2025. For comparison:
| State | Action | Status |
|---|---|---|
| Arizona | SB 1025 passed both chambers | Vetoed by governor |
| Wyoming | Constitutional amendment proposed | Committee stage |
| Texas | HB 4752 considered | Did not advance |
| Oklahoma | Passed Senate | Failed House |
| New Hampshire | HB 302 passed | Signed into law ✓ |
| Utah | SB 168 passed Senate | Amended to remove Bitcoin |
New Hampshire holds the distinction of being the first US state to actually sign Bitcoin reserve legislation into law (2025). New Hampshire's law allows up to 5% of certain state funds in Bitcoin with a $500 billion+ market cap threshold — Bitcoin qualifies, most altcoins don't.
For the full picture of state Bitcoin legislation, see our Bitcoin state reserve legislation guide.
Arizona's Bitcoin advocates haven't given up after the 2025 veto:
Constitutional amendment route: Rather than sending a bill to the governor, a constitutional amendment goes directly to voters via referendum. Hobbs can't veto a voter initiative. Arizona legislators have explored this path.
New legislation: Fresh bills in the 2026 legislative session target the specific objections Hobbs raised — smaller allocation caps, stronger custodial requirements, explicit pension fund exclusions to address fiduciary concerns.
Changing political landscape: The 2026 election cycle may shift Arizona's executive branch. Bitcoin advocates are tracking gubernatorial races closely.
Coalition building: The Arizona Bitcoin business community has grown significantly. Tech companies and Bitcoin mining operations in the state provide economic arguments alongside the investment case.
Arizona's experience has become a template — both for what to do and what to watch out for:
What Arizona got right:
What other states learned:
The state Bitcoin reserve movement is still early. New Hampshire's success proved it's possible. Arizona's near-miss proved it's politically viable even in closely divided states. The question is which state becomes the second to succeed.
If Arizona eventually passes Bitcoin reserve legislation, the implications extend beyond its borders:
Precedent effect: A large state (population ~7.5 million, $63 billion annual budget) holding Bitcoin validates the concept at scale. Smaller state successes can be dismissed; Arizona cannot.
Pension fund signal: Arizona's teacher and public employee pension funds are substantial. If those fund managers conclude Bitcoin is a fiduciary-appropriate asset, it changes the legal landscape nationally.
Demand effect: State reserve purchases represent ongoing buying pressure from sovereign-adjacent entities. Combined with corporate treasury buyers and ETF inflows, this adds to Bitcoin's demand-side fundamentals.
Other state dominoes: Every state that passes Bitcoin reserve legislation makes the next state's passage more politically defensible. Arizona succeeding would accelerate the timeline for other states still in committee.
Arizona's Bitcoin reserve journey is far from over. The 2025 veto was a setback, not an end — the same legislature that passed SB 1025 is looking for alternative paths. The constitutional amendment route in particular could bypass executive veto entirely.
For Bitcoiners watching state-level adoption: Arizona is the state to watch. The political will exists. The legal framework is mostly built. The remaining obstacle is executive resistance that legislative creativity is working to route around.
Did Arizona pass a Bitcoin law? The legislature passed SB 1025 through both chambers in 2025, but Governor Katie Hobbs vetoed it. No Bitcoin reserve law is currently in effect in Arizona.
Which state was first to pass a Bitcoin reserve law? New Hampshire, in 2025. Their law allows up to 5% of certain state funds in qualifying digital assets (Bitcoin meets the market cap threshold).
Can Arizona try again? Yes. Legislators are pursuing new bills and possibly a constitutional amendment route (which goes to voters and bypasses the governor's veto power).
How much would Arizona have put in Bitcoin? SB 1025 allowed up to 10% of specified state funds. Arizona's combined treasury and pension assets run into the tens of billions — 10% would represent billions in potential Bitcoin purchases.
Would Arizona's Bitcoin reserve affect me as a taxpayer? Indirectly. If the reserve gains in value, it reduces pressure on state budgets. If it loses value significantly, it could increase that pressure. The 10% cap was designed to limit this exposure.
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New Hampshire became the first US state to sign a Bitcoin reserve law on May 6, 2025. This post covers what HB 302 actually says, the 5% cap and $500B market cap threshold, why NH succeeded where Arizona failed, and what comes next for state Bitcoin reserves.
Over 20 US states have introduced Bitcoin reserve bills in 2026. New Hampshire has passed one. Arizona cleared its legislature. Texas, Florida, Oklahoma, North Carolina, and others have active bills. Here's the current status of every major state Bitcoin reserve effort.
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