North Carolina Moves Closer to Establishing First State-Backed Bitcoin Reserve
North Carolina’s House of Representatives has advanced legislation aimed at allowing the state to invest public funds in Bitcoin, a move that could set a national precedent if enacted.
BTC Exposure Through Regulated Products
The proposed measure, titled the Digital Assets Investment Act (House Bill 92), was introduced on February 10 by Republican House Speaker Destin Hall and cleared its third reading in the House on April 30 with a 71-44 vote. The bill will now proceed to the Senate for further consideration.
House Bill 92 outlines a cautious, regulated path for the state to gain exposure to Bitcoin, prohibiting direct purchases of the cryptocurrency while permitting investments through professionally managed, regulated exchange-traded products (ETPs). These would be limited to vehicles listed on established U.S. exchanges such as NASDAQ and the New York Stock Exchange.
Eligibility Requirement
A strict eligibility requirement ensures that only digital assets with a market capitalization of at least $750 billion, currently met exclusively by Bitcoin, would qualify for investment. This threshold is intended to mitigate risk and volatility in the state’s investment portfolio.
If passed into law, North Carolina would become the first U.S. state to incorporate Bitcoin into its treasury holdings via regulated investment instruments.
With House approval secured, the bill now awaits deliberation in the North Carolina Senate. Its progression will be closely watched as states across the U.S. evaluate their positions on digital asset adoption within public finance frameworks.
Safeguards and Risk Management Provisions
To address potential risks, the bill stipulates multiple layers of oversight. Any digital assets acquired by the state would be held in secure cold wallets protected by multi-signature authentication protocols. Additionally, monthly independent audits would be conducted to ensure the integrity and security of the holdings.
Further, the bill mandates that the State Treasurer may only proceed with crypto investments following an independent third-party assessment confirming the assets are maintained under secure custody arrangements and comply with regulatory standards.
A notable clause requires a two-thirds vote from the state legislature to liquidate any Bitcoin holdings, and such action would be permissible only in the event of a declared financial emergency.
Implications for Retirement Plans and Diversification Strategy
An amended provision in the bill allows the State Treasurer to assess the feasibility of offering digital asset investment options, in the form of exchange-traded products, to members of state employee retirement and deferred compensation plans. While this remains exploratory, it signals an openness to integrating digital assets into broader public financial structures.
Representative Keith Kidwell, the bill’s lead sponsor, framed the initiative as a conventional risk management strategy. He likened the proposal to diversifying investment portfolios into emerging markets or technology stocks, emphasizing it was a “prudent and calculated step” rather than a speculative gamble.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
