North Carolina Takes the Digital Plunge: Is the State Ready to Bet on Crypto for Public Funds?

A new bipartisan bill, backed by Speaker of the House Destin Hall, is making its way through the North Carolina legislature, proposing to modernize how the state invests its funds by including digital assets such as cryptocurrency, NFTs, and stablecoins. This legislation seeks to allow the State Treasurer to invest up to 5% of certain state funds in these assets, bringing North Carolina’s investment strategy into the digital age.

The bill allows the State Treasurer to diversify investments by adding digital assets to the portfolio. The state would be able to invest in digital assets, but only after a third-party consultant assesses whether the investments meet security, risk, and compliance standards. This move is meant to ensure that any digital asset investments are secure and appropriate for the state’s funds.

Another important aspect of the bill is its potential impact on state employees. It suggests that members of certain state retirement plans could be given the option to invest in digital assets through exchange-traded products, provided the Treasurer and the state’s retirement board agree that this is a feasible and beneficial choice.

One of the most forward-thinking elements of the bill is the creation of a Digital Asset Reserve. If passed, the bill would authorize law enforcement agencies, in collaboration with the State Treasurer, to explore the feasibility of creating a state-managed fund to hold digital assets that are seized or forfeited in criminal investigations.

This move follows a broader trend in states looking to adapt their investment strategies to the growing world of digital finance. North Carolina’s bill follows similar efforts in other states, such as New Hampshire, where lawmakers have recently explored integrating Bitcoin and other digital currencies into their financial systems. This growing interest reflects a broader recognition that digital assets are increasingly becoming a key part of the global economy.

While digital assets like cryptocurrency have been praised for their potential growth, they are not without risks. Volatility in the market and security concerns are real challenges that lawmakers are considering carefully. However, proponents of the bill argue that the safeguards included—such as third-party assessments and limiting exposure to just 5% of state funds—will help minimize these risks.

The bill has already passed several readings in the House with strong support, and now it heads to the Senate for further discussion. If it becomes law, North Carolina will be among the first states to formally allow investments in digital assets, setting a new precedent for how states can diversify their financial portfolios.

The future of this legislation depends on how lawmakers balance the excitement of new opportunities with the need to protect the state’s funds. As the digital finance world continues to evolve, North Carolina may soon be leading the charge in adapting state investments to keep up with the changing times.