Legislators in North Carolina are advancing legislation that could enable the state to allocate a portion of its public retirement funds into digital assets, including cryptocurrencies like Bitcoin. Two identical bills, House Bill 506 and Senate Bill 709, introduced on March 24 and March 25 respectively, propose the creation of a new agency — the North Carolina Investment Authority — tasked with evaluating and managing investments in digital assets.
Oversight and Risk Considerations
House Bill 506, also known as the Investment Modernization Act, was introduced by Representative Brenden Jones. This legislation outlines a framework under which the newly formed authority could invest up to 5% of various state funds into cryptocurrencies and other blockchain-based assets. These assets may include stablecoins, non-fungible tokens (NFTs), or any electronically based assets providing economic, proprietary, or access rights. Senate Bill 709 mirrors the House version and seeks to implement the same provisions in the upper chamber.
Unlike other state-level crypto investment proposals, the North Carolina bills do not establish specific market capitalization thresholds for the digital assets under consideration. Instead, the Investment Authority would have the discretion to analyze and determine the suitability of each asset, weighing both risks and potential returns. Additionally, the legislation stipulates that all assets must be held in secure custody solutions to ensure protection against cyber threats and theft.
The proposals are not designed to mandate a permanent crypto reserve, as noted by Bitcoin legislation tracker Bitcoin Laws. Rather, the bills authorize — but do not require — the holding of digital assets like Bitcoin for the long term. Bitcoin Laws noted in a post on X, “North Carolina HB506 doesn’t create a ‘Bitcoin reserve’ as such. However, for our purposes (tracking direct state investment), it qualifies for the SBR tracking list. At least for now.”
Comparisons and Broader Context
This legislative approach places North Carolina in a category similar to Florida, which has proposed similar bills allowing state-level public fund investment in Bitcoin, although it falls short of creating a mandated reserve. Conversely, states like Texas and Minnesota have adopted different strategies, either mandating reserves or limiting investments to state-managed retirement accounts, refraining from enabling direct state-level crypto investment.
The proposed North Carolina Investment Authority would operate under the state Treasury and be led by the Treasurer. If passed, the new agency would oversee decisions related to digital asset investments and could serve as a model for other U.S. states seeking to modernize their public investment strategies.
This initiative aligns with the growing interest among U.S. institutions and public entities in gaining exposure to the digital asset market. With cryptocurrency increasingly being discussed as part of diversified investment portfolios, the proposed legislation may pave the way for broader adoption of such assets across state-level finance.
Despite the exciting prospects, the bills must undergo further debate and potential revisions before becoming law, and certain elements may require additional approval from Congress.
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