A new bill introduced in the North Carolina Senate would allow the state to invest up to 10% of certain public funds in Bitcoin, making it one of the most ambitious state-level cryptocurrency proposals in the United States.
Senate Bill 327, introduced by Senator Michael Garrett (R), would authorize the State Treasurer to allocate a portion of the General Fund, Highway Fund, and several pension reserves into Bitcoin and Bitcoin-related financial products, including spot ETFs.
Key Provisions
- 10% allocation cap: No more than 10% of any eligible fund could be allocated to Bitcoin at any given time.
- Custody requirements: All Bitcoin holdings must be maintained through qualified custodians approved by the State Treasurer.
- Reporting obligations: Quarterly public reports on holdings, cost basis, and performance relative to traditional allocations.
- Gradual implementation: The bill includes a 24-month phase-in period, with incremental allocation increases not exceeding 2.5% per quarter.
Arguments in Favour
Proponents argue that Bitcoin's historical performance and its properties as a store of value make it a suitable addition to state investment portfolios. Senator Garrett stated that the bill is intended to provide North Carolina with "exposure to a rapidly maturing asset class that offers portfolio diversification and potential inflation hedging."
Opposition and Concerns
Critics have raised concerns about Bitcoin's volatility, questioning whether public pension funds should be exposed to an asset that can experience 20-30% drawdowns within short periods. The State Treasurer's office has not yet taken a public position on the bill.
The bill is scheduled for its first committee hearing in April 2026.
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Comments
A state investing public funds in Bitcoin is a bold move. North Carolina is making a statement about the future of public finance. Other states will follow if this succeeds.
The 5% allocation cap is sensible risk management. Enough to benefit from appreciation but not enough to pose systemic risk to state finances. Well-calibrated policy.