North Carolina House passes bill to establish Bitcoin Reserve Fund

The North Carolina House of Representatives approved House Bill 92, the Strategic Bitcoin Reserve bill. This legislation allows the state to invest up to 10% of its funds in Bitcoin-related exchange-traded products (ETPs).

While the bill does not permit direct purchases of Bitcoin, it opens the door for North Carolina to invest in professionally managed Bitcoin investment vehicles — such as ETFs — traded on regulated U.S. exchanges like NASDAQ and the NYSE. If enacted, the measure could make North Carolina the first U.S. state to gain Bitcoin exposure through regulated investment products.

To mitigate volatility and risk, the bill limits eligible digital asset investments to those with a market capitalization of at least $750 billion — a threshold currently met only by Bitcoin.

The legislation applies to various public funds, including the state’s General Fund, Highway Fund, and 24 other designated accounts that support government operations.

Debate ranges over North Carolina’s Bitcoin investment bill

The bill has been greeted with some combination of applause and alarm. Proponents of the bill claim that by adding Bitcoin to the state’s list of investments, North Carolina will gain a means to broaden its financial holdings. And they think it might serve as a hedge against inflation and improve returns over the long term.

The proposal’s lead sponsor, Representative Keith Kidwell, compared the move to a common portfolio diversification strategy, saying it was no more unusual than if a financial advisor suggested that investors apportion their funds into emerging markets or technology stocks. He said it was not a diversion focused on “betting the farm” but a prudent and calculated step any organization should take to buttress itself against risk.

But not everyone is convinced. Rep. Maria Cervania, a Democrat from Wake County, expressed concern about the security and reliability of investing in digital currencies. She said she was still worried about the extent of the state’s involvement and the risks it could be taking.

State workers also complained. Flint Benson of the State Employees Association of North Carolina cautioned that investing in a volatile asset like Bitcoin could put retiree benefits at risk.

Still, the bill does contain several safeguards. Bitcoin owned by the state would be kept in secure cold wallets, secured by multi-signature authentication. Independent audits would occur monthly. Any decision to sell the Bitcoin reserves would need two-thirds support from the state legislature — but only during a financial emergency.

Governor Josh Stein has given the legislation a friendly reception. Though he has not publicly endorsed it, people close to his office say it’s the right move because it consolidates power in the hands of the state treasurer and fits North Carolina’s innovation goals.

States move to establish Bitcoin reserve funds

North Carolina isn’t alone in its push toward digital asset integration. Several U.S. states are considering similar laws enabling them to invest in Bitcoin and other digital assets.

Arizona, for instance, recently approved a law that permits 10% of its public resources to be invested in cryptocurrency. It’s planning to release its own Bitcoin reserve later this year.

Although the North Carolina House has approved the bill, it still needs to pass through the Senate before becoming law.

Its outcome could significantly influence how the state manages its underfunded public pension system, which faces a $16 billion shortfall in the coming years.

But for now, it is up to the Senate to deliver an opportunity to make North Carolina an early mover in the public sector adoption of digital finance.