North Carolina House Approves Bill for State Crypto Investments
Legislation Paves the Way for Government Investment in Digital Assets
In a significant development for the cryptocurrency landscape, the North Carolina House of Representatives has passed the Digital Assets Investment Act, also known as House Bill 92. The bill, which allows the state treasurer to allocate a portion of government funds into approved cryptocurrencies, was approved with a vote of 71 to 44 on April 30, 2023. This legislation now moves to the Senate for further consideration.
Details of the Bill
Introduced by Republican House Speaker Destin Hall in February, House Bill 92 authorizes the state treasurer to invest up to 5% of the state’s investments into designated digital assets. However, these investments are subject to stringent conditions. Before the treasurer can allocate funds into cryptocurrencies, an independent third-party assessment must confirm that the digital assets are held securely and that they meet necessary risk oversight and regulatory compliance standards.
Recent amendments to the bill also enable the treasurer to explore the feasibility of allowing members of retirement and deferred compensation plans to invest in digital assets held as exchange-traded products (ETPs). This provision could open new avenues for state employees to diversify their investment portfolios.
Related Legislation: State Investment Modernization Act
Alongside House Bill 92, the North Carolina House also passed the State Investment Modernization Act, or HB 506, with an overwhelming majority of 110 to 3. The focus of this bill is to create the North Carolina Investment Authority (NCIA), aimed at enhancing the management of state investments by transferring investment responsibilities from the treasurer to the newly formed authority. If enacted, this change would shift the authority to invest in digital assets from the treasurer to the NCIA, which would require board approval for crypto investments based on third-party assessments.
North Carolina Treasurer Brad Briner has expressed support for both pieces of legislation, indicating a proactive stance towards embracing digital asset investment in the state.
North Carolina’s Position in the Cryptocurrency Legislation Race
With the passage of these bills, North Carolina positions itself as a frontrunner in cryptocurrency legislation at the state level, trailing only Arizona, which currently leads in the race to approve laws that enable local governments to invest in cryptocurrencies. Just days before North Carolina’s vote, Arizona’s House approved two bills—SB 1025 and SB 1373—that propose mechanisms for establishing a state crypto reserve. These developments highlight a growing trend among U.S. states to explore the integration of cryptocurrencies into public financial management.
As states across the country navigate the evolving crypto landscape, the outcome of North Carolina’s legislative efforts will be closely watched as a potential model for others considering similar measures.
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