The NC Digital Assets Investments Act, sponsored by 27 Republicans, would permit the state treasury department to place up to 5% of funds’ assets in digital currencies like Bitcoin.
The bill applies to more than two dozen funds, including the state’s $129 billion pension plan covering firefighters, teachers, police officers and state employees. It also calls for the North Carolina treasurer and the State Bureau of Investigation to study how seized digital assets could be used to establish a digital assets reserve.
House leaders have adjusted key aspects of the legislation since a smaller group of Republicans, including House Speaker Destin Hall, introduced it two months ago.
Under the current bill, digital assets can comprise up to 5% of any fund — lowered from an original 10% cap, and a third-party consultant now must assess any crypto investments. The updated legislation also opens the door to more cryptocurrencies, erasing an initial market capitalization requirement (of $750 billion) that had essentially made only Bitcoin eligible.
Wording around the state treasurer having exclusive knowledge of the “private key” that serves as a passcode to their virtual wallet has been replaced with a rule that virtual currencies be held in a “secure custody solution” platform.
The state Senate has already backed public cryptocurrency investments. On April 19, the chamber passed a budget which allows for 5% of funds’ assets to be digital.
Democratic Gov. Josh Stein has voiced support for a state cryptocurrency investing bill, telling The News & Observer in February that he favored “giving people more authority to do their jobs.”
“That doesn’t mean that the treasurer must make those investments,” he said. “But if there are wise investments that can result in a positive, diversified return for the pension fund, then I’m comfortable with the treasurer making that investment.”
Bitcoin investing supporters and skeptics
At least 40 states have introduced cryptocurrency bills this year, according to theNational Conference of State Legislatures, with Florida, Ohio, Iowa and North Dakota among those weighing public investments. A pair of states, Wisconsin and Michigan, already allow crypto in their retirement portfolios. And on Tuesday, Arizona legislators advanced a bill to create the country’sfirst state Bitcoin reserve.
Momentum for Bitcoin investing at the state level has coincided with President Donald Trump’s calls for a national digital asset reserve tethered to the world’s largest cryptocurrency. Strategic reserves are a stockpile the nation stores for crisis moments, like the U.S. Strategic Petroleum Reserve.
As of Tuesday evening, the world’s top cryptocurrency sold at around $95,500. Bitcoin’s price has nearly doubled over the past 12 months, propelled by a huge spike in November following Trump’s election victory.
The North Carolina Blockchain Initiative worked with state lawmakers on its cryptocurrency investment legislation. In an X post in February, Hall said the bill aligns North Carolina “with President Trump’s vision for a national Bitcoin stockpile” while keeping the state at the forefront of a financial innovation.
Critics of public Bitcoin investing say the 16-year-old currency has been volatile and lacks the oversight of traditional money.
“When we’re talking about the dollar amounts that are in the pension funds, we’re talking about the people whose retirements are at risk here,” Rep. Brian Turner, an Asheville Democrat, told The News & Observer. “We should be, I would say, using more proven financial instruments to fund those funds.”
So long sole fiduciary?
It isn’t yet known who precisely will make North Carolina pension decisions — on digital or traditional assets.
Another bill changing how North Carolina handles state investments passed the House on Tuesday, moving the state closer to replacing its sole fiduciary model with a shared governance structure.
House Bill 506would create the North Carolina Investment Authority, within the treasurer’s department. It would be overseen by a five-member board of directors responsible for managing state investments.
Currently, the treasurer’s department has an Investment Management Division with more than 20 professionals who oversee operating funds — such as highway dollars — and pension funds, including the Teachers’ and State Employees’ Retirement System and the Consolidated Judicial Retirement System. Despite the presence of that team, the state treasurer alone currently holds final authority over investment decisions.
Briner, during his campaign for state treasurer, championed this change. He has continued to do so, arguing that North Carolina is at the bottom for pension plan returns, in part because of its governance structure.
The state’s pension plan returns averaged 5.9% annually over the past decade, below the 7.5% national average, with states like Washington at about 11%, Briner said in mid-April during a committee hearing. For Briner, the state does not need to take as much risk as Washington but does need to take on more.
“I seek to relinquish some of my power to a board of qualified investment professionals to help deliver better returns for this state so that we can get to a better place, not just for our budget, but for our retirees,” he said.
The bill passed that committee with no dissenting views raised, as it did on the House floor on Tuesday. The sole question on the floor came from Rep. Pricey Harrison, a Greensboro Democrat, who wanted to confirm that crypto language had been eliminated from the bill. A previous version of the bill included language allowing cryptocurrency investments, but that provision was removed.
Under the current bill, the board would include the state treasurer as an ex officio member, plus one appointee each from the House speaker, Senate president pro tempore, governor and state treasurer. Appointees must have investment expertise and would serve staggered six-year terms.
The board would appoint a chief investment officer, who must have at least 15 years of experience managing pensions, endowments or similar funds. The CIO would be responsible for the day-to-day investing.
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