North Carolina Moves Forward with Bitcoin Reserve Legislation

By: Isha Das

North Carolina is the latest U.S. state to take significant strides towards embracing digital assets, particularly Bitcoin. Lawmakers in the state have introduced a legislative bill that could potentially pave the way for the state treasurer to allocate up to 10% of certain state funds into Bitcoin and other qualifying digital assets. The bill, known as House Bill 92, was crafted by Representatives Destin Hall, Mark Brody, and Steve Ross. This forward-looking initiative sets a stringent eligibility criterion, stipulating that only assets with a market cap exceeding $750 billion in the 12 months leading up to the investment will be considered. In this light, Bitcoin remains the prime candidate, given that its market cap comfortably surpasses this threshold, placing it ahead of the second-leading cryptocurrency, Ethereum.

A critical aspect of the proposal is the stipulation that investments in Bitcoin and other digital assets should be conducted via regulated exchange-traded products. This ensures that state funds are invested with a higher degree of safety and regulatory oversight. Another safeguard embedded in the bill is the requirement for third-party investment managers handling digital assets to possess at least $100 million in assets under management, thereby ensuring experienced handling of these potentially volatile assets. Oversight of this initiative will fall under the purview of the Governor and State Council, adding an additional layer of governance to the investment process.

North Carolina's decision places it as the 20th U.S. state to consider such legislation, signifying a broader trend as states like Montana and Florida have introduced similar bills. Notably, Montana's House Bill 429 aims to create a special revenue account for investing in precious metals and digital assets, including those with substantial market capitalizations. Concurrently, Florida's initiative seeks to leverage Bitcoin as a hedge against inflation, allowing up to 10% of public funds to be directed towards Bitcoin investments. These developments highlight a growing recognition of Bitcoin's potential stability and growth amidst traditional economic markets.

Furthermore, this move is reflective of a larger mosaic of legislative efforts across the nation, with states like Maryland, Iowa, and Kentucky also proposing bills for Bitcoin integration into public investment strategies. This surge of interest in Bitcoin indicates increasing acceptance of digital assets at state governmental levels, with the potential for significant implications on public fund management and investment norms. As more states join the Bitcoin legislation bandwagon, the financial landscape could witness a paradigm shift in terms of how digital currencies are perceived and utilized at the governmental level.