North Carolina House Approves Bitcoin Investment for $127 Billion Pension Fund

TLDR

North Carolina House passed two bills allowing up to 5% of $127 billion pension fund to be invested in cryptocurrencies
A new five-member North Carolina Investment Authority would oversee state investments
The legislation aims to address a $16 billion pension deficit and improve investment returns
Bill now heads to Senate for further consideration
State Treasurer Brad Briner supports the bills while some Democrats raised concerns about crypto volatility

North Carolina’s House of Representatives has taken a bold step toward modernizing the state’s investment strategy by approving legislation that would allow Bitcoin and other cryptocurrencies to be included in its $127 billion pension portfolio. The move comes as the state faces a $16 billion deficit in its pension system and seeks to improve investment returns that have lagged behind other states.

The House approved two key bills this week that would transform how the state manages its pension investments. House Bill 506, which passed with overwhelming support (110-3), would establish a five-member North Carolina Investment Authority to oversee state investments.

This new board would include the State Treasurer and four appointees selected by the Speaker of the House, Senate President Pro Tem, governor, and treasurer. Each appointee must have “expert knowledge of investments” and more than 10 years of successful management experience in pensions, endowments, or similar fields.

The second piece of legislation, House Bill 92, passed with a vote of 71-44. It would allow the investment authority to allocate up to 5% of the state’s portfolio to cryptocurrency investments.

Investment Strategy Changes

The bills represent a major shift from the more conservative approach taken by previous State Treasurer Dale Folwell. The current Treasurer, Brad Briner, a Republican elected in November 2024, has thrown his support behind both bills.

“We need to spread the allocation around,” said Rep. Keith Kidwell, a Republican from Beaufort, emphasizing the importance of diversification in investment strategies. Proponents view the legislation as a way to utilize emerging market opportunities to benefit state employees and retirees.

The cryptocurrency investment bill includes several safeguards. It limits investments to crypto equivalent of mutual funds rather than direct purchases of specific currencies. This provision ensures a more cautious approach to this volatile market.

New amendments also allow the treasurer to examine the possibility of letting members of retirement and deferred compensation plans elect to invest in digital assets held as exchange-traded products.

Mixed Reactions

The legislation has received mixed reactions both inside and outside the General Assembly. Governor Josh Stein has expressed support for the bills and for expanding the Treasurer’s authority over state investments.

However, some Democrats have voiced concerns about the risks associated with cryptocurrency investments. Rep. Maria Cervania, a Democrat from Wake County, stated, “I still have a lot of questions about this investment strategy and the level of commitment we’re making to it.”

The State Employees Association of North Carolina has expressed opposition to the bills, highlighting potential risks for state workers’ pensions.

North Carolina is not alone in exploring cryptocurrency investments for government funds. Arizona is currently leading the state-level race to approve such legislation, with two bills already passed by both its House and Senate, awaiting the governor’s decision.

The North Carolina bills now advance to the Senate for further consideration. If passed, the authority to invest in digital assets would transfer from the treasurer to the new North Carolina Investment Authority.

The board would need to obtain an independent third-party assessment confirming that the crypto holdings are maintained with a secure custody solution and that risk oversight and regulatory compliance standards are met before making any investments.

Following Tuesday’s vote, the bills now head to the Senate, where they will face further scrutiny before potentially becoming law.