The lower house of North Carolina’s General Assembly has approved a bill that proposes the state’s Department of State Treasurer conducts a study to assess the feasibility and potential advantages of incorporating bitcoin into the state’s holdings.
The study aims to explore the potential impact of cryptocurrency and gold investments on North Carolina’s funds if a portion were allocated to these assets.
A study for secure storage
Titled the “State Precious Metals Depository Study,” the recently introduced bill focuses on the secure storage, insurance, and liquidation of virtual currency on behalf of the state.
It has now advanced to the Senate for further deliberation, highlighting the recognition of the increasing significance of virtual currency, as defined in G.S. 53-208.42(20), and the proposal’s intention to assess its potential impact on the state’s financial strategy.
The study outlined within the bill aims to evaluate the anticipated advantages of allocating a portion of the General Fund to virtual currency.
By doing so, the state seeks to mitigate inflation and systemic credit risks, reduce overall portfolio volatility, and enhance portfolio returns over time. This legislative effort reflects a proactive approach to understanding and potentially harnessing the benefits of virtual currency within the state’s financial operations.
Dan Spuller, in a subsequent tweet, emphasized that this move is just one of several pro-bitcoin initiatives undertaken by the Initiative in the state.
The bill’s language directly quotes from it highlights the expected impact of assigning a portion of the General Fund to virtual currency. The objective is to hedge against inflation and systemic credit risks, lower portfolio volatility, and enhance portfolio returns over the long term.
As part of the ongoing legislative process, the proposed study on incorporating bitcoin into North Carolina’s holdings would also evaluate the advantages and drawbacks of utilizing a “privately managed depository or another state’s depository.”
The bill successfully passed the House, with 73 members voting in favor, 40 against, and seven absent.
To become law or face a potential veto from Governor Roy Cooper, the bill now awaits approval from the Senate, marking the next critical step in the legislative journey.
Future impact
This is only one of the ongoing discussions happening in the United States around cryptocurrencies.
Earlier on June 29, President Biden hinted at the introduction of crypto regulation and U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, affectionately known as “Crypto Mom,” expressed her belief that cryptocurrency regulations in the United States should exercise caution and avoid treating the technology solely as a financial instrument.
Regulations become more paramount as areas like Hong Kong and Europe continue to release their own regulatory guidelines for the industry, giving companies greater clarity about how they should operate.
