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North Carolina Passes Bill To Integrate Bitcoin Into $127 Billion Pension Fund

The North Carolina House has recently approved two significant bills that aim to transform the management of the state’s pension fund, allowing for a modernized investment strategy that includes cryptocurrencies like Bitcoin (BTC). 

This legislative move comes in response to a $16 billion deficit in the pension system and a need for improved investment returns compared to other states.

NC’s Investment Authority Could Allocate 5% Of Portfolio To Bitcoin

House Bill 506 proposes the establishment of a five-member board, the North Carolina Investment Authority, which will oversee the state’s $127 billion investment portfolio. This board will be composed of the State Treasurer, who currently holds final authority over state investments, along with four other appointees. 

The appointments will be made by key state leaders, including the Speaker of the House, the Senate President Pro Tem, and the governor. Each appointee must possess substantial expertise in investments and have a minimum of ten years of successful management experience in pensions, endowments, or similar fields.

In conjunction with this restructuring, House Bill 92 allows the Investment Authority to allocate up to 5% of the state’s portfolio to cryptocurrency and Bitcoin investments. This provision is designed to limit investments to mutual fund equivalents of cryptocurrencies rather than direct purchases of specific currencies, ensuring a more cautious approach to this volatile market.

Supporters of the legislation, including State Treasurer Brad Briner, believe that diversifying investments into cryptocurrencies represents a proactive strategy to enhance the fund’s performance. 

Democrats Raise Concerns Over Crypto Risks

Briner, a Republican elected in November, has expressed a desire to modernize the investment approach, contrasting with the more conservative strategies employed by his predecessor, Dale Folwell.

“We need to spread the allocation around,” said Rep. Keith Kidwell (R-Beaufort), emphasizing the importance of diversification in investment strategies. The bills are seen as a step toward utilizing emerging market opportunities to benefit state employees and retirees.

However, the measures have drawn criticism from some Democrats who caution against the inherent risks associated with cryptocurrency investments. Rep. Maria Cervania (D-Wake) expressed her reservations, stating, “I still have a lot of questions about this investment strategy and the level of commitment we’re making to it.” 

Concerns about the volatility of cryptocurrencies have prompted calls for a more cautious approach to integrating them into the pension fund. The legislation has sparked varied reactions outside the General Assembly. 

Governor Josh Stein has voiced his support for the bills, endorsing the expansion of the Treasurer’s authority over state investments. Conversely, representatives from the State Employees Association of North Carolina have expressed opposition, highlighting potential risks for state workers’ pensions.

Following their passage in the House—with House Bill 506 receiving a vote of 110-3 and House Bill 92 passing 71-44—both bills now advance to the Senate for further consideration. 

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Featured image from DALL-E, chart from TradingView.com


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