- North Carolina has advanced a bill to study the possibility of holding cryptocurrencies, specifically bitcoin, in the state treasury.
- The bill appropriates $50,000 to examine the process of acquiring, securely storing, insuring, and liquidating virtual currencies on behalf of the state.
The North Carolina House of Representatives passed House Bill 721, which includes provisions to investigate the acquisition and potential benefits of virtual currency, with a particular emphasis on Bitcoin. The bill, titled “State Precious Metals Depository Study” and released in April, seeks to investigate the process of securely holding, insuring, and liquidating virtual currency on the state’s behalf.
The bill has passed the North Carolina House of Representatives and now moves on to the state Senate for review. If the Senate approves it, it must then be signed into law by Governor Roy Cooper.
The bill acknowledges the increasing importance of virtual currency, as defined in G.S. 53-208.42(20), and proposes assessing its potential impact on the state’s financial strategy. The study outlined in the bill will look at the expected benefits of allocating a portion of the General Fund to virtual currency to hedge against inflation and systemic credit risks, lowering overall portfolio volatility and increasing portfolio returns over time.
According to Mark Brody, the Republican who sponsored the bill, “This is step one to eventually trying to protect our assets in North Carolina.”
Language relating to the study of virtual currency, including a specific reference to Bitcoin, was added after Dan Spuller, head of industry affairs at the North Carolina Blockchain Initiative, testified on behalf of the Initiative in front of the North Carolina House Standing Committee. Spuller, who later tweeted that this is one of many pro-Bitcoin pushes the Initiative is making in the state, received unanimous support for the language added to the bill.
The bill emphasizes the importance of evaluating the costs, benefits, and security measures associated with various depository options and exploring the potential benefits of virtual currency such as Bitcoin. The study will look into the viability of using a privately managed depository, another state’s depository, or establishing a state-run depository in North Carolina. The ultimate goal is to find the best custodian, guardian, and administrator for virtual currency assets held by the state, its agencies, political subdivisions, or other entities.
The bill states directly, “the expected impact of allocating a portion of the General Fund to virtual currency to hedge against inflation and systemic credit risks, reduce overall portfolio volatility, and increase portfolio returns over time.”
Including virtual currency and Bitcoin in the legislation demonstrates North Carolina’s proactive approach to researching and investigating Bitcoin’s potential benefits.
