North Carolina House Endorses Bitcoin Allocation for $127 Billion Pension Plan's Investments
Crypto Infiltration in the Tar Heel State
Welcome to a new era of investment in North Carolina! The House has given the green light to two groundbreaking bills, turning the state's traditional pension fund management on its head. These game-changing pieces of legislation could see cryptocurrencies making their way into the $127 billion pension portfolio, aiming to combat a whopping $16 billion deficit and increase investment returns.
The House's recent move was driven by two bills, House Bill 506 and House Bill 92, which sailed through the House with a whopping majority of 110-3 for the former and a slightly closer 71-44 for the latter. These bills are now making their way to the Senate.
Here's a lowdown on the bills:
Shaking Up the Status Quo
House Bill 506 brings about a significant overhaul, establishing the North Carolina Investment Authority, a five-member body responsible for managing the state’s colossal portfolio. The board will consist of the State Treasurer and four appointees chosen by key figures in the state government, with at least a decade of successful investment management experience in pensions, endowments, or similar fields.
In stark contrast to the more conservative approach of previous State Treasurers, current Officeholder Brad Briner stands firmly behind these bills. As Rep. Keith Kidwell, a Republican from Beaufort, put it, "Diversification is key!"
Riding the Crypto Wave
House Bill 92 takes the bull by the horns, allowing the investment authority to allocate up to 5% of the state's portfolio toward cryptocurrency investments. This could mark a significant stride in harnessing emerging market opportunities for the benefit of state employees and retirees.
But the bill treads carefully, limiting investments to crypto-equivalent mutual funds rather than purchasing specific currencies to maintain a cautious approach to this volatile market. Additionally, a new amendment allows the treasurer to investigate the possibility of enabling members of retirement and deferred compensation plans to elect to invest in digital assets held as exchange-traded products.
Opposing Viewpoints
Reactions to the bills have been mixed. Gov. Josh Stein has shown his support for the bills and the expansion of the Treasurer's authority over state investments. However, concerns have been raised by Democrats about the risks associated with crypto investments. Rep. Maria Cervania questioned, "I still have my reservations about this investment strategy and the commitment level."
The State Employees Association of North Carolina also voiced opposition to the bills, citing potential risks to state workers' pensions. North Carolina isn't the only state considering investment in digital assets; Arizona leads the charge, with similar proposals already being debated.
As of now, the bills await further scrutiny in the Senate, where they could potentially become law. Before any investments can be made, the board will need to secure an independent third-party assessment confirming that crypto holdings are safely custody-managed, and that established risk oversight and regulatory compliance standards are met.
Stay tuned for further updates on this exciting development in North Carolina's investment strategy!
[1] House Bill 506[2] House Bill 92[3] News & Observer[4] Asheville Citizen-Times[5] Bitget
- The North Carolina House has approved House Bill 506 and House Bill 92, potentially allowing cryptocurrencies to be part of the state's $127 billion pension portfolio.
- House Bill 506 establishes the North Carolina Investment Authority, a board responsible for managing the state’s vast portfolio, consisting of the State Treasurer and four appointees with investment management experience.
- The new bills are a significant departure from the previous approach and are anticipated to combat a $16 billion deficit and increase investment returns.
- House Bill 92 specifically permits the investment authority to allocate up to 5% of the state's portfolio toward cryptocurrency investments.
- Investments will be made through crypto-equivalent mutual funds to maintain a cautious approach to this volatile market.
- Despite Republican support, Democrats, Gov. Josh Stein, and the State Employees Association of North Carolina have voiced concerns about the risks associated with crypto investments.
- Arizona is also considering similar investment proposals, making North Carolina's move part of a broader trend in the business world and the realm of technology, finance, politics, and general-news.
- Before cryptocurrency investments can be made, the board must secure an independent third-party assessment confirming safe custody management and compliance with established risk oversight and regulatory standards.
