Arizona Governor Vetoes Cryptocurrency Bills, Approves Regulation for Bitcoin ATMs
Phoenix, AZ – Arizona Governor Katie Hobbs has made a significant move in the state’s cryptocurrency landscape by vetoing two proposed bills aimed at expanding the state’s involvement in digital currencies. However, she has concurrently signed a new regulatory measure for Bitcoin ATMs, marking a complex shift in her approach to cryptocurrency regulation.
On May 12, 2023, Governor Hobbs officially vetoed Senate Bill 1373, which sought to establish a Digital Assets Strategic Reserve Fund. This fund would have allowed Arizona to hold cryptocurrency obtained through various means, such as seizures or legislative allocations. In her veto statement, Hobbs expressed concerns regarding the current volatility in the cryptocurrency market, stating, “Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.” She emphasized that she has already enacted legislation this session permitting the state to utilize cryptocurrency without exposing general fund dollars to potential risks.
This decision follows another veto from May 3, where Governor Hobbs rejected Senate Bill 1025, dubbed the Arizona Strategic Bitcoin Reserve Act. This proposed legislation would have permitted the state to invest up to 10% of its treasury and retirement funds in Bitcoin and other digital assets. According to data from bitcoinlaws.io, 26 U.S. states have introduced similar strategic crypto reserve bills, with 18 still actively pursuing such initiatives.
In addition to these vetoes, Governor Hobbs also turned down Senate Bill 1024, which aimed to authorize state agencies to accept cryptocurrency payments for taxes, fines, and fees via approved service providers. Although the bill intended to mitigate risks associated with direct exposure to the volatile cryptocurrency market, she concluded that it still posed “too much risk.”
New Regulations for Bitcoin ATMs
In contrast to her vetoed bills, Governor Hobbs approved House Bill 2387 on May 12, which introduces a suite of consumer protection rules aimed at cryptocurrency kiosk operators. The new regulations are designed to reduce fraud and enhance transparency in transactions involving Bitcoin ATMs.
Under this legislation, operators of Bitcoin ATMs will be required to display clear, multilingual warnings about common scams associated with cryptocurrencies. Users must also acknowledge these risks before completing transactions. The bill mandates that operators provide detailed receipts that include essential transaction data, contact information, applicable fees, and policies regarding refunds.
Furthermore, the legislation introduces transaction limits, capping new customer transactions at $2,000 per day and allowing returning users to transact up to $10,500 per day after a period of 10 days. Additionally, kiosk providers are mandated to offer customer service that is available 24/7, with a toll-free number prominently displayed on each machine. Notably, if a first-time user is deceived into sending cryptocurrency under false pretenses and reports it within 30 days with proof, they are entitled to a full refund, including any transaction fees.
Currently, there are 20 active Bitcoin ATMs across Arizona, as reported by CoinATMRadar.
Future of Cryptocurrency in Arizona
Governor Hobbs has not entirely dismissed the potential of digital assets in Arizona. On the same day she approved the Bitcoin ATM regulation, she signed House Bill 2749, which updates the state’s unclaimed property laws to encompass digital assets. This new legislation allows the state to retain unclaimed cryptocurrencies in their original form instead of converting them into fiat currency.
As the cryptocurrency landscape continues to evolve, the implications of Governor Hobbs’ decisions may set the stage for Arizona’s regulatory approach to digital currencies moving forward. The recent bills reflect a cautious but structured response to the complexities surrounding cryptocurrency, focusing on consumer protection while managing the broader risks associated with digital asset investments.
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