North Carolina Proposes Bill to Allow Bitcoin Investment as State Reserve
North Carolina lawmakers have taken a step toward integrating cryptocurrency into the state’s financial strategy with the introduction of Senate Bill 327 (SB327). The bill proposes allowing the State Treasurer to allocate up to 10% of public funds to Bitcoin, in an effort to strengthen North Carolina’s economic position and promote financial innovation.
Details of SB327
Introduced by Republican Senators Todd Johnson and Brad Overcash, SB327 positions Bitcoin as a strategic reserve asset for the state. If passed, North Carolina would join a growing number of states that are considering or have implemented the integration of Bitcoin into their financial reserves.
According to the bill, Bitcoin holdings would be stored in multi-signature cold storage, a highly secure method to prevent unauthorized access. To ensure transparency and security, these holdings would undergo monthly audits. Liquidation of Bitcoin would be limited to “severe financial crises” and would require the approval of two-thirds of the General Assembly.
Establishing a Bitcoin Economic Advisory Board
SB327 also proposes the creation of a Bitcoin Economic Advisory Board, which would provide ongoing guidance on the management of the state’s Bitcoin reserves. The board would assess the opportunities and challenges associated with holding and using Bitcoin, ensuring that investment decisions are in the long-term interests of North Carolina.
Exploring Bitcoin Mining
In addition to direct investment, the bill explores the possibility of establishing Bitcoin mining operations as a way to increase the state’s wealth at a lower cost. This could help North Carolina capitalize on its surplus energy and generate additional revenue for the budget.
Bitcoin-Involving Investment Strategies
The State Treasurer will be allowed to engage in Bitcoin-backed investment strategies, including staking, lending, and other regulated yield-generating activities. This opens up opportunities for the state to capitalize on new and potentially lucrative forms of investment in the cryptocurrency space.
Contact House Bill 92 (HB92)
SB327 is not North Carolina’s only attempt to incorporate cryptocurrency into financial policy. Previously, House Bill 92 (HB92) was introduced, which would allow the State Treasurer to invest in Bitcoin exchange-traded products (ETPs). HB92 proposes allocating up to 10% of public and retirement system funds to ETPs that track digital assets with an average market capitalization of at least $750 billion over the past twelve months, which currently only Bitcoin meets.
National Context and Regulatory Trends
North Carolina’s initiative comes as other states are considering or implementing measures related to cryptocurrencies. President Donald Trump recently announced plans to create a national Bitcoin reserve, with the goal of making the United States the “cryptocurrency capital of the world.” Additionally, North Dakota passed a bill regulating cryptocurrency ATMs, capping daily transactions at $2,000 per user and requiring operators to be licensed to transmit money, in response to a surge in Bitcoin ATM fraud since 2020.
Conclusion
The introduction of SB327 represents a significant step forward for North Carolina in adopting and integrating blockchain technology and cryptocurrencies into the state’s financial strategy. If passed, the bill would not only diversify the state’s investment portfolio but also cement North Carolina’s position as a hub for financial innovation in the digital age.