North Carolina House Speaker Destin Hall has introduced a bill to invest public money in cryptocurrency. The bill would enable the state to allocate funds to create a Strategic Bitcoin Reserve and other Bitcoin-related investments.
According to news reports, the North Carolina House Speaker is pushing to invest up to 10% of the state’s general and highway funds in crypto assets. However, this would be limited to digital assets with high market capitalizations, making BTC the only qualifying cryptocurrency.
North Carolina as a Leader in Technology
The introduction of House Bill 92 that was sponsored by Representatives Destin Hall, Mark Brody, and Steve Ross, makes North Carolina the 20th state to introduce similar bills aiming to establish a Strategic Bitcoin Reserve by putting public money into crypto where most of them intend to invest portions of their state’s retirement funds. According to the Bill, the cryptocurrencies that qualify should have a market capitalization of at least $750 billion during the one year preceding the potential investment to qualify. Representative Hall said in a statement:
“Investing in digital assets like Bitcoin not only has the potential to generate positive yields for our state investment fund but also positions North Carolina as a leader in technological adoption & innovation.”
Regulated via ETP
As a result, only Bitcoin could comfortably qualify to meet this requirement as its threshold is over two times that of the following digital asset, Ethereum, whose current market capitalization stands at around $323 million. Moreover, the bill further stipulates that the investment will happen via a regulated exchange-traded product (ETP). Under the bill, the state’s Treasurer will be allowed to invest in digital assets via the General Fund, Highway Fund, and 24 other special funds it supervises. The implementation of the digital asset investment will be overseen by the Governor and Council of State and a third-party investment manager that must have at least $100 million in assets under management.
Apart from North Carolina, other states that have recently proposed a similar Strategic Bitcoin Reserve bill include Kentucky, which plans to allocate at least 10% of its reserves to BTC and other cryptocurrencies. Florida Senator Joe Gruters has also recently introduced the SB 550 bill, which aims to allow the state’s Financial Officer to use public funds to invest in BTC and create a Strategic Bitcoin reserve.
Bill Awaiting Legislative Process
Building a US Strategic Bitcoin Reserve has gained much traction nationally, especially following President Donald Trump’s stance on cryptocurrencies. Industry leaders like Mathew Sigel have proposed that creating a Bitcoin reserve strategy would be significant as it would help maintain the country’s economic strength. North Carolina’s Strategic Bitcoin Reserve Bill now moves to the legislative process where lawmakers will debate it, approve it, and make it one of the first states to use public funds to invest in crypto.
Conclusion
As institutional adoption rates rise, several states in the US are considering creating a Strategic Bitcoin reserve like the federal government plans to put in place. Lawmakers in Iowa, Maryland, and Kentucky have introduced bills similar to North Carolina’s. Only time will tell whether the respective houses will approve the proposed bills and make the crypto dream a reality.
Frequently Asked Questions (FAQs)
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What is a strategic Bitcoin reserve?
This would be a state or national stockpile of Bitcoin, similar to the US government’s strategic petroleum reserve to utilize in case of a global disruption.
Is there a case for a strategic reserve for Bitcoin?
Establishing a strategic reserve for BTC could strengthen a nation or state’s economic stability through debt offsetting, increased diversification, and a hedge against inflation.
How would a BTC strategic reserve work in the US?
This would involve the government buying and holding a BTC stockpile like gold reserves. The US federal government already has over 200,000 Bitcoins, mostly confiscated from criminal elements.
How would such a reserve impact the crypto market?
Proponents believe a strategic bitcoin reserve could trigger a crypto’ arms race’ to reshape the global economic order and legitimize cryptocurrencies.
References
Appendix Glossary of Key Terms
House Bill: Refers to a proposed law for introduction in a House of Parliament to introduce a new legislation, amend an existing one, or repeal one.
Bitcoin: A cryptocurrency that operates on peer-to-peer software and cryptography and is free of any central control or the oversight of banks or governments.
Strategic Reserve: A stockpile of essential resources or commodities that can be used when needed, especially during a crisis or supply disruption.
Exchange Traded Product: A financial product that trades like a stock, bond, or commodity on an exchange.
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