North Carolina Introduced Legislation for State Pension Funds to Invest on Bitcoin

North Carolina has introduced legislation to allow state pension funds to invest in Bitcoin and other digital assets. As of March 28, 2025, multiple bills have been proposed in the North Carolina General Assembly to facilitate this. One notable proposal is House Bill 92, the “North Carolina Digital Assets Investments Act,” introduced on February 10, 2025, by House Speaker Destin Hall. This bill authorizes the State Treasurer to invest up to 10% of various state funds, including the pension plan, into Bitcoin exchange-traded products (ETFs). The legislation specifies that eligible digital assets must have an average market capitalization of at least $750 billion over the previous 12 months, effectively limiting investments to Bitcoin at this time. The state’s pension fund, part of the $127 billion in retirement systems, could see a significant portion allocated to Bitcoin if this bill passes, with supporters arguing it could diversify investments and potentially yield higher returns. More recently, on March 24 and 25, 2025, two identical bills—House Bill 506 (the Investment Modernization Act) and Senate Bill 709 (the State Investment Modernization Act)—were introduced.

These bills propose creating the North Carolina Investment Authority, an independent body under the state Treasury, to manage digital asset investments. Unlike HB 92, these bills do not set a market cap threshold and allow up to 5% of state pension funds to be invested in a broader range of digital assets, including cryptocurrencies, stablecoins, and NFTs, after a risk-reward analysis. The focus here is on flexibility and modernization rather than mandating a specific Bitcoin reserve. Additionally, Senate Bill 327, the “Bitcoin Reserve and Investment Act,” introduced on March 18, 2025, takes a more targeted approach. It allows the State Treasurer to allocate up to 10% of public funds specifically into Bitcoin, to be held in multi-signature cold storage as a long-term strategy. This bill emphasizes Bitcoin as a “financial innovation strategy” and includes strict conditions for liquidation, such as requiring a two-thirds vote from the General Assembly during a severe financial crisis. These legislative efforts reflect a growing trend among U.S. states to explore cryptocurrency investments for public funds. However, the proposals have faced mixed reactions.

Supporters, including Hall and State Treasurer Brad Briner, highlight potential gains and North Carolina’s chance to lead in technological innovation. Critics, like the State Employees Association of North Carolina (SEANC), express concerns over Bitcoin’s volatility and the risk to retirees’ pensions. For instance, SEANC lobbyist Flint Benson has called it a “roller coaster” unfit for promised benefits. As of now, these bills are under consideration. HB 92 saw initial skepticism in the House Commerce Committee in early March 2025 but advanced after pressure from Hall. HB 506 and SB 709 are in early stages, while SB 327 is also pending further debate. The outcome remains uncertain, but North Carolina is clearly positioning itself as a potential player in state-sponsored crypto investment.

Proponents argue that allocating up to 5-10% of the $127 billion pension fund to Bitcoin or digital assets could diversify the portfolio and hedge against inflation. Bitcoin’s historical annualized returns—around 230% over the past decade—far outpace traditional assets like stocks (10-12%) or bonds (3-5%). If this trend holds, even a small allocation could boost long-term returns for retirees. Critics highlight Bitcoin’s extreme price swings—e.g., dropping 50% in 2022 alone—as a threat to pension stability. A sudden crash could erode funds meant for guaranteed payouts, putting pressure on taxpayers to cover shortfalls. The lack of a long-term track record for crypto in pension portfolios amplifies this concern. Bills like SB 327 propose holding Bitcoin in cold storage, which prioritizes security but limits liquidity. This could complicate quick responses to market shifts or emergencies. Conversely, HB 92’s focus on Bitcoin ETFs offers more flexibility but introduces counterparty risks tied to fund managers.

If successful, this could open the door to broader alternative investments (e.g., gold, real estate) in state funds, challenging traditional allocation models heavily weighted toward equities and fixed income. North Carolina could position itself as a pioneer among U.S. states in embracing cryptocurrency, potentially attracting blockchain businesses and talent. This aligns with a broader trend—e.g., Texas and Wyoming have crypto-friendly policies—but puts North Carolina ahead of larger states like California or New York, which have been more cautious. The bills’ fates may hinge on political dynamics. House Speaker Destin Hall (R) and Treasurer Brad Briner (R) back the measures, but opposition from groups like SEANC, which leans toward public-sector interests often aligned with Democrats, could stall progress. A polarized General Assembly might delay or dilute the proposals. State-level crypto adoption could draw scrutiny from federal regulators like the SEC or Treasury Department, especially if pension losses trigger calls for oversight. Conversely, success might pressure Congress to clarify crypto’s legal status, currently a gray area.

Retirees and state employees may feel uneasy about gambling their pensions on what some view as speculative “internet money.” Trust in state leadership could erode if investments sour, especially given SEANC’s vocal resistance. On the flip side, success could normalize crypto among older demographics. High returns could benefit retirees, but critics argue crypto gains often concentrate among early adopters—wealthy investors or tech-savvy elites—potentially exacerbating wealth gaps if pension funds merely ride their coattails rather than drive broad economic growth. Embracing Bitcoin could signal North Carolina as a forward-thinking state, appealing to younger, tech-oriented residents and countering brain drain to coastal tech hubs. It might also spark educational initiatives around blockchain literacy.

North Carolina’s move follows states like Arizona (vetoed crypto pension bill in 2023) and Virginia (allowing banks to custody crypto). Success here could embolden others, creating a domino effect. Sovereign funds in places like Norway or Singapore have dipped into alternatives, but none have formally adopted Bitcoin. North Carolina could set a unique example—or a cautionary tale. Bitcoin appreciates significantly (e.g., hitting $150,000 by 2030), pension funds grow, and North Carolina gains a reputation as a visionary state. A crypto crash wipes out billions, retirees face cuts, and political backlash kills future experimentation.  Modest gains or losses occur, the experiment is deemed a wash, and the state refines its approach without major disruption. The outcome depends on market performance, legislative execution, and public tolerance for risk. It’s a high-stakes bet—whether it pays off or flops, it’ll shape how states view crypto for years.