In a significant move reflecting the evolving landscape of state investments, North Carolina’s House of Representatives has approved a bill permitting the state treasurer to allocate public funds into specified cryptocurrencies. Passed with a 71 to 44 vote on April 30, the Digital Assets Investment Act, or House Bill 92, marks a pivotal moment in the state’s financial strategy as it now progresses to the Senate for further consideration.
A New Era for State Investments
The bill, introduced in February by Republican House Speaker Destin Hall, proposes a strategic allocation of up to 5% of the state’s investments into digital assets. This initiative is contingent upon obtaining an independent third-party assessment ensuring that these crypto holdings are safeguarded with secure custody solutions and adhere to rigorous risk oversight and regulatory compliance standards. The legislation also includes amendments that would allow the treasurer to consider the viability of permitting members of retirement and deferred compensation plans to invest in digital assets via exchange-traded products (ETPs).
In tandem, the House passed the State Investment Modernization Act, or HB 506, with an overwhelming 110 to 3 vote. This bill proposes the establishment of the North Carolina Investment Authority (NCIA), which would assume responsibility for managing state investments from the treasurer. Should HB 506 become law, the NCIA would require board approval, based on third-party assessments, before proceeding with crypto investments. Local media outlet NC Newsline reported that Treasurer Brad Briner is in favor of both legislative measures.
North Carolina in the National Crypto Legislation Race
North Carolina’s legislative moves mirror a broader national trend, with states vying to modernize investment strategies to include digital currencies. As it stands, Arizona is leading this legislative race, having recently passed two crypto-related bills—SB 1025 and SB 1373—through both its House and Senate. These bills, now awaiting the governor’s decision, propose different frameworks for establishing a state cryptocurrency reserve.
The developments in North Carolina, while notable, raise several questions. As the state positions itself as a burgeoning player in the crypto legislative landscape, observers are keenly watching how the integration of digital assets into public investment portfolios will unfold. The potential for both upside and volatility in such markets necessitates a cautious yet forward-thinking approach.
Implications and Future Considerations
As digital assets continue to capture the attention of state governments, the implications for public finance could be profound. While proponents argue that the inclusion of cryptocurrencies offers diversification and potential returns, skeptics caution against the inherent volatility and regulatory uncertainties that these assets carry. The requirement for independent third-party assessments is a nod to these concerns, aiming to provide a layer of security and oversight.
Looking ahead, North Carolina’s legislative actions could either pave the way for more states to follow suit or serve as a cautionary tale of the complexities involved in integrating digital currencies into public portfolios. The success or challenges faced by the state could influence national discourse on the role of cryptocurrencies in government finance.
As the Senate deliberates on the bill, stakeholders are left to ponder: Will the embrace of digital assets by state treasurers become a norm, or will caution prevail in the face of market unpredictability? The outcome of North Carolina’s legislative journey remains to be seen, but it undoubtedly adds a compelling chapter to the ongoing dialogue surrounding the intersection of public finance and digital innovation.
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This article is based on: North Carolina House passes state crypto investment bill
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
