Arizona Shuts Down Bitcoin Reserve Bill; Community Reacts

By: bitcoin ethereum news|2025/05/14 11:00:10
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The last two months have been full of ups and downs for the Bitcoin reserve bills and regulations. While one state moves ahead with a bill promoting the use of crypto assets, other rejects it. Now, Arizona Governor Katie Hobbs has vetoed two major crypto bills after giving a green light to one last week. Bitcoin Reserve Bill Blocked On Monday, the Governor’s office shared that the two bills, SB 1373 and SB 1024, have been vetoed by Katie Hobbs. The first bill, SB 1373, would have allowed Arizona to hold cryptocurrencies like Bitcoin as part of its state reserve assets. The state could have reserved up to 10% of Arizona’s rainy-day funds in digital assets like BTC. The Governor shared her letter to Senate President Warren Petersen, outlining the reasoning behind her veto. She said:“Current volatility in the cryptocurrency market 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.” Hobbs was referring to Arizona House Bill 2749, which she signed on May 7. Under this legislation, Arizona can have digital assets like Bitcoin that are unclaimed as part of the state’s reserve. However, if the ongoing SB 1373 bill cleared the Governor’s table, Arizona would have been the second US state to have a Bitcoin reserve after New Hampshire, which passed a similar bill just last week. Community’s Reaction to Arizona Governor’s Vetoes On May 3, Governor Hobbs also vetoed a bill, SB 1025, that allowed Arizona to invest retirement funds in crypto assets, which would have created a Bitcoin reserve. The crypto community had reacted sharply to that veto, with crypto investor Anthony Pompliano saying: The Governor of Arizona just vetoed a bill that would have seen the state invest in Bitcoin. Imagine the ignorance of a politician to believe they can make investment decisions. If she can’t outperform Bitcoin, she must buy it. Arizona state Sen. Wendy Rogers also had famously quipped: Politicians don’t understand that Bitcoin doesn’t need Arizona. Arizona needs Bitcoin. On May 12, Hobbs did sign one bill around crypto, regulating Bitcoin ATMs. This bill, House Bill 2387, introduces limits on cash deposits and withdrawals to combat money laundering and scams. The crypto community was not happy with this move either, accusing Arizona of not embracing crypto as state money, but willing to add crypto regulations and hurdles to its wider adoption. Crypto Integration Into State Finances Delays The other major vetoed bill, SB 1024, would have enabled citizens to make civil payments, including taxes, using cryptocurrencies. This would have made Arizona the first US state to integrate crypto into both state treasury and payment systems. But in a clear signal that the state isn’t ready to take that leap, Hobbs shot down both. This isn’t the first time Gov. Hobbs has blocked pro-crypto legislation. In 2023, she vetoed a bill that would have made Bitcoin legal tender in Arizona, arguing that such a move was clearly within the jurisdiction of the federal government, not individual states. Arizona’s decision is part of a growing pattern of cautious state-level Bitcoin reserve bills. While states like New Hampshire, Wyoming, and Florida are taking a pro-crypto stance, others are hesitating, especially in the absence of federal direction. But more and more states are gradually opening up, evident last week as Bitcoin surged beyond $100K as three US states approved crypto BTC reserve laws in 24 hours. ✓ Share: Deekshith Pinto Deekshith is a seasoned news editor with over a decade of experience in the news and media industry. He began his career as an engineer at Toyota but soon swapped tools for storytelling. After his master’s at Nalanda University, he joined Times Internet as a staff writer. Over the next few years, he served as the News Editor for Indian bureaus of multiple international platforms, mainly The Weather Channel and Business Insider. He scaled both these large platforms and mentored dynamic teams of young writers and content creators. His editorial instincts are driven by a passion for storytelling, a fascination with data, and just the right amount of chaos to keep things interesting. Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss. Source: https://coingape.com/breaking-arizona-shuts-down-bitcoin-reserve-bill-proposal-community-reacts/

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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions

The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.


There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."


Question One: Is this encryption the same as Signal's encryption?


No. The difference lies in where the keys are stored.


In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.


X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.


This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.


The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.


The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.


After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."


From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.


In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.



As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."


Issue 2: Does Grok know what you're messaging in private?


Not continuous monitoring, but a clear access point.


For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.


This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.


There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."


Issue 3: Why is there no Android version?


X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.


In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.



WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.


X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.


These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.


Elon Musk's "Super App"


This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.



X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.


Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.


The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.


X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.


The help page sentence has never been just technical instructions.


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