Crypto ambitions clash carefully in Arizona and Washington

Two major US crypto policy efforts were hit by obstacles last week, revealing the growing gap in the way digital assets are integrated into government operations. In Arizona, Gov. Katie Hobbs rejected a bill that allowed the state to keep Bitcoin in reserves, calling the plan financially at risk. Meanwhile, in Washington, a group of Senate Democrats who once supported the federal stubcoin framework has withdrawn their support, saying the proposed bill lacks sufficient protections.

Democrat opposition threatens progress in the landmark US stubcoin bill

a Union Of Senate Democrats with a history of supporting the crypto industry, they show opposition to the current form of Republican-led bills aimed at establishing a regulatory framework. stablecoins In the US.

Their resistance, revealed in a joint statement on May 3rd, threatens to derail rare, bipartisan efforts to bring much needed clarity to the situation of US digital assets.

Democrats raise the red flag rather than the act of genius

The law in question, the guidelines and establishment of national innovation for the US Stablecoins (Genius) Act, was introduced by Republican Sen. Bill Hagerty, and is ready for floor consideration this week in the Senate.

If given, Genius act Mark the first comprehensive US law focused on surveillance of Stablecoin. Many analysts believe it is important to protect economic stability and increase investors’ confidence in the crypto market.

But despite the initial bipartisan support from when the bill moved forward through the Senate Banking Committee in March, nine Senate Democrats have said the bill now includes “a lot of issues that need to be addressed.”

Among the lawmakers expressing their concerns are Sen. Reuben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim. Their new position represents a major change in momentum.

Opposing Democrats stressed in their statement that they would oppose a procedural vote to advance the bill unless they undergo further revisions. Their main concerns revolve around the bill’s anti-money laundering (AML) provisions, national security implications, surveillance of foreign and ridiculous issues, and accountability for uncomplicated actors.

Other signatories include Sen. Rafael Warnock, Katherine Cortez Mast, Ben Ray Luhan, John Hickenlooper and Adam Schiff.

Particularly absent on the list were Senator Kirsten Gillibrand and Angela Blacks, who co-hosted the bill with Hagerty. Their continued silence sparked speculation about possible behind-the-scenes negotiations to save the bipartisan consensus.

Industry and political interests are high

In the crypto industry, genius is seen as a potential breakthrough in solving the current patchwork of state-by-state regulations. Industry leaders have long advocated for a federal framework that defines stubcoin standards, reduces legal uncertainty, and levelles US-based issuer playing fields.

But the latest resistance from Senate Democrats could slow that progress. Consideration of the bill’s floor is expected to begin imminently as votes could occur within a week. If the opposition is held tightly, the law will be sent back to the committee, allowing both investors and developers to further extend the policy gap left at Limbo.

Legislatively, tensions continue to be maintained between the crypto sector and US banking regulators, creating legislative waves. Caitlin Long, CEO of Custodia Bank, recently criticized the Federal Reserve for maintaining a policy that restricts banks’ issuance stablecoins In public blockchain, despite recent rollbacks of several crypto-related supervision guidelines.

Long points out that the January 2023 directive effectively prohibits US banks from engaging with Stablecoins on unauthorized networks. She argued that only federal law can override that position, urging Congress to act quickly.

“Congress should hurry,” Long said. “The Fed is protecting the stubcoins of big banks while locking in innovation.”

Fragile, bipartisan balance method

Internal Democrat disparities expose the fragile nature of bipartisan crypto policy decisions in Washington. Although the parties agree with the urgency to establish a regulatory foundation for digital assets, there remains a keen disagreement on how to balance innovation with systematic risk and national security concerns.

Despite their objections, the democratic senator who signed the statement argued that he “aspires to continue working with his colleagues to address these issues.” This leaves the door open due to potential compromises, but the time will be shorter as the bill approaches Senate floor voting.

As genius acts become engulfed in the balance, the future of stable regulations in the United States, and potentially the broader crypto market, is uncertain.

Arizona Governor Katie Hobbs rejection bill adds bitcoin to state reserves and halts bold crypto experiments

Meanwhile, Arizona Governor Katie Hobbs has officially rejected a law that would allow the Grand Canyon state to become the first person to hold Bitcoin as part of its official reserves.

The decision hit local crypto advocates, with Signal continuing skepticism from state leaders about the role of digital assets in public finance.

The Senate Bill 1025 or the bill known as Digital Asset Strategic Reserve Proposal, sought to allow Arizona officials to convert seized funds to Bitcoin (BTC) and establish reserves overseen by the state government. It passed the Arizona House on April 28 with 31-25 votes, riding a wave of Republican support and optimism over Bitcoin’s long-term value proposition.

But Gov. Hobbs did good with her advance warning, rejecting the bill on Friday, citing concerns over volatility and lack of proven stability in the cryptocurrency market.

“Today I rejected Senate Bill 1025. The Arizona Retirement System is one of the strongest in the country because it has a healthy and informed investment,” Hobbs said. I wrote it In a statement to Senate President Warren Petersen. “The Arizonan Retirement Fund is not where the state attempts to invest in untested investments like cryptocurrency.”

Her decision was posted to the Arizona Legislature. Websiteresponding instantly from both crypto industry advocates and political critics who wanted Arizona to be used as a model for the adoption of public Bitcoin.

Heading towards a wider crypto push

The veto shed light on the growing tension between pro-cryptic lawmakers and more cautious government leaders who remain vigilant about integrating digital assets into taxpayer assistance programs. In particular, while the bill would not have had a direct impact on traditional retirement accounts, Gov. Hobbs elicited similarities between conservative investment policies and her broader fiscal philosophy.

The law was one of two related Bitcoin invoices under consideration. Companion Building, SB1373 Arizona State accounting, which allocates up to 10% of the state’s rainy day funds to Bitcoin and other digital assets, is still waiting for the final vote. The bill could now face similar resistance from the governor’s office.

Arizona’s efforts reflect the failed attempts in other states, including Oklahoma, South Dakota, Montana and Wyoming, with similar digital asset booking proposals being rejected, suspended or withdrawn due to political friction or financial concerns.

In contrast, North Carolina has taken a particularly different path. On April 30, the state House passed the Digital Asset Investment Act, allowing treasurers to invest up to 5% of certain funds in approved cryptocurrencies. The bill has since advanced to the state Senate and has been viewed as one of the most important state-level pushes for the adoption of digital assets in public finance.

Crypto supporters view these measures as key steps towards financial modernization and hedging strategies in an era of increasing distrust in Fiat currency policy. They also argue that cryptocurrencies like Bitcoin provide long-term protection against inflation and geopolitical risks.

Federal momentum and Trump’s factors

The state-level cryptography faces mixed consequences, but it builds momentum at the federal level, driven primarily by President Donald Trump and his Republican allies.

In March, Trump signed an executive order proposing the creation of a “strategic Bitcoin Reserve” and a broader “digital asset reserve,” showing a more bullish federal stance on integrating crypto into national economic strategy.

Trump’s initiative, along with legislative proposals supported by the GOP, presents a sharp contrast to the Biden administration’s more cautious tone of voice over cryptocurrencies during its term. His administration aims to challenge what many of its political rights are deemed overreach by bank regulators and the Federal Reserve, particularly with regard to the use of civilian crypto and the federal Reserve.

Hobbs’ response to his veto was quick. Pro-Crypto lawmakers in Arizona claim that the state is missing out on the opportunity to diversify its financial holdings and build a future-looking investment strategy. Others accused the governor of being too closely in harmonious with traditional bank interests at the expense of innovation.

What’s next in Arizona?

Despite the retreat, the fight isn’t necessarily over. Bitcoin Reserve supporters may reintroduce the revised version of the bill in future legislative sessions. The survival of SB1373 could also depend on whether lawmakers are willing to amend the provisions to gain the governor’s support.

For now, Arizona is on a growing list of states struggling to define the role of digital assets in government operations. The path to mainstream adoption is not smooth as national crypto policies are still in fluidity and states experiment with their own approaches.