North Carolina Proposes Legislation for State to Invest in Bitcoin ETPs

North Carolina has become the latest U.S. state to propose legislation allowing public funds to be invested in digital assets, specifically Bitcoin exchange-traded products (ETPs). The bill, introduced on February 10 by Speaker of the House Destin Hall, is aimed at diversifying the state’s investment portfolio and positioning it as a leader in adopting emerging technologies.

The proposed legislation, titled the “NC Digital Assets Investments Act” (HB 92), would grant the state treasurer the authority to invest in “qualified” digital assets. However, the bill includes specific conditions for such investments. To qualify, the digital assets must be exchange-traded products with an average market capitalization of at least $750 billion over the previous 12 months. Currently, this means that only Bitcoin ETPs meet the criteria. Furthermore, the bill limits the amount invested to no more than 10% of the balance of any state fund at the time of investment.

In introducing the bill, Speaker Hall emphasized the potential benefits of digital assets like Bitcoin for the state’s investment strategy. “Investing in digital assets not only has the potential to generate positive yields for our state investment fund, but also positions North Carolina as a leader in technological adoption and innovation,” Hall said. He also noted that the bill aligns with former President Donald Trump’s vision for a national Bitcoin stockpile, adding that North Carolina could play a key role in advancing Bitcoin initiatives at the state level.

The legislation also highlights the growing interest in cryptocurrency as a hedge against traditional economic challenges, such as inflation and the devaluation of the U.S. dollar. The state’s investments would benefit various public funds, including pensions for teachers and state employees, insurance funds, and veterans’ funds.

Co-sponsor of the bill, Mike Schietzelt, underscored the potential of blockchain technology and decentralized finance in shaping the future. “Blockchain technology, decentralized finance, and other innovations in the crypto space will shape our future in many new ways. North Carolina is poised to capitalize on these emerging opportunities,” Schietzelt said.

The proposal comes at a time when more U.S. states are introducing crypto investment legislation. North Carolina’s bill adds to the growing trend, with 19 states now considering similar proposals. Arizona and Utah have advanced their crypto-related bills beyond the House committee level, while North Dakota has rejected such legislation.

On February 7, lawmakers in Montana introduced a bill (HB 429) to create a "state special revenue account" for investing in digital assets and precious metals, further adding to the momentum for state-level crypto investments.

As the interest in cryptocurrency investments continues to rise, North Carolina’s legislative proposal signals the state’s desire to embrace the digital asset space and explore new financial opportunities. If passed, the bill could serve as a model for other states looking to incorporate crypto assets into their investment strategies.