Arizona says NO to CBDC ban and crypto payments in sweeping veto

On May 12, Arizona Governor Katie Hobbs rejected three crypto-friendly bills, Senate Bills 1373, 1024, and 1095.

The bills aimed to expand the government’s role in digital asset adoption while opposing central bank digital currencies (CBDCs).

At the same time, the governor signed a new law, House Bill 2387, that introduces tighter rules for crypto ATM operations in the state.

The moves reflect the governor’s cautious approach to integrating digital assets into the state’s regulatory landscape.

Why Hobbs blocked the pro-crypto measures

Senate Bill 1373, which proposed using confiscated digital assets to fund a reserve account, was rejected over concerns about exposing state finances to volatile assets.

Hobbs pointed out that current laws allow limited use of such funds without risking the general fund.

According to her:

“Current volatility in cryptocurrency markets does not make a prudent fit for general fund 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.”

The governor also blocked Senate Bill 1024, which would have allowed crypto payments for fines and other state-imposed charges.

Although the bill included third-party payment providers as intermediaries, Hobbs argued the measure still left the state vulnerable.

She emphasized that legislators from both parties shared this concern, noting that:

“While this bill would allow State agencies to enter into agreements to protect the State from risks associated with cryptocurrency, legislators on both sides of the aisle acknowledged it still leaves the door open for too much risk.”

On the issue of CBDCs, Hobbs vetoed Senate Bill 1095, which aimed to ban their use preemptively.

The governor dismissed the bill as unnecessary, noting that no such digital currency currently exists in the US.

Crypto ATM regulations

Despite the vetoes, Governor Hobbs signed House Bill 2387, establishing clear rules for state crypto ATM operations.

The legislation requires kiosk operators to display multilingual fraud alerts, issue receipts with wallet addresses, and provide transaction hashes. ATM operators must also deploy blockchain analytics to identify suspicious activity involving their machines.

The law also limits daily transactions at crypto kiosks to $2,000 for new customers and $10,500 for existing ones. Meanwhile, the bill noted:

“If a new customer as defined in subsection l, paragraph 7 of this section has been fraudulently induced to engage in a cryptocurrency kiosk transaction, the cryptocurrency kiosk operator shall issue a full refund for the fraudulently induced cryptocurrency kiosk transaction, including any fees charged in association with the transaction.”

In addition, the operators must offer round-the-clock customer service and maintain full compliance with anti-money laundering (AML) requirements.

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