• Imagine this: North Carolina could put up to 10% of its state funds into Bitcoin! A new bill is making waves with this very idea.
• But there’s a catch! Bitcoin investments will only happen if its market value has been a hefty $750 billion or more for a full year.
• It’s a debate! Supporters see Bitcoin as a smart move against rising inflation, but critics are sounding the alarm about the risks to public money and our pensions.

In a bold move, North Carolina lawmakers have introduced a bill that proposes dipping into the world of Bitcoin for state investments – potentially allocating up to 10% of funds managed by the state. This isn’t just any proposal; House Bill 92, officially named the “Digital Assets Investments Act,” signals a clear ambition for North Carolina to be a leader in embracing cryptocurrency. The buzz around the statehouse is that this initiative could spark financial innovation and provide a shield against the ever-present threat of inflation.

What are the Investment Rules?

The brainchild of House Speaker Destin Hall, along with Representatives Mark Brody and Steve Ross, this bill lays out some specific ground rules. It would give the state treasurer the green light to invest in digital asset exchange-traded products. Now, here’s the key: to be eligible for investment, these digital assets need to have proven their staying power with a market capitalization of at least $750 billion over the past year. Right now, Bitcoin is the only cryptocurrency that clears this significant hurdle.

Looking closer at the bill, it’s clear there are safeguards in place. The state wouldn’t just dive in headfirst; investments in digital assets are capped at 10% of any individual fund’s total balance at any given time. Where would this money come from? Think state-managed pots like the General Fund, the Highway Fund, and even public pension systems. Importantly, to keep things secure and manage risk, all investments must go through regulated digital asset exchange-traded products.

A National Trend with a Nod from Washington  

North Carolina isn’t alone in considering a crypto leap. It turns out at least 23 other states are also exploring similar kinds of legislation. This growing interest in Bitcoin investments isn’t happening in a vacuum. Federal level discussions about keeping financial markets stable have played a role, and recent signals from federal authorities encouraging states to think about Bitcoin’s potential in public finance have really fueled this nationwide trend.

The Cheers and the Concerns 

For the lawmakers championing this proposal, the message is clear: Bitcoin has demonstrated it’s not just a flash in the pan, showing both staying power and consistent growth. Supporters are convinced that jumping into Bitcoin could be a smart move for North Carolina, helping to broaden its financial portfolio and align with its forward-thinking strategy. 

However, not everyone is on board. Voices of caution are being raised by some lawmakers and financial experts. They’re pointing to Bitcoin’s well-known price swings, worrying that this volatility could put state funds at considerable risk. The State Employees Association of North Carolina has also voiced its concerns. The big question on many minds is what impact this could have on pension funds and overall financial stability – and it’s a question that’s being taken seriously.

So, what’s next? This proposed legislation is heading into the review process in the coming weeks. If it gets the green light, North Carolina could be on the verge of a major shift in how states approach Bitcoin investments and manage their finances.