U.S. State Considers Allowing Crypto Investments in Retirement Funds

North Carolina is considering a bold move to integrate digital assets into its state retirement fund investments.

A new proposal in both the state House and Senate could allow up to 5% of these funds to be allocated to cryptocurrencies and other digital assets. This development comes as institutional interest in the crypto space grows, despite the ongoing volatility in the market that remains a concern for more traditional investors.

The legislation consists of two identical bills, one in the House and one in the Senate, which aim to establish an independent body within the state Treasury. This body would oversee the selection and management of digital assets for the state’s retirement funds. The proposed laws offer a broad definition of digital assets, including cryptocurrencies, stablecoins, and NFTs, without setting market cap requirements—making it more flexible than similar proposals from other states.

In terms of risk management, the bills outline strict security measures to safeguard the retirement funds, addressing common concerns among institutional investors. Any digital asset selected would need to undergo a thorough evaluation of its risk and reward potential. Unlike some state proposals that require long-term holdings, these bills offer flexibility in managing crypto investments, allowing for adjustment as market conditions evolve.

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Meanwhile, another proposal, the Bitcoin Reserve and Investment Act, seeks to allocate up to 10% of public funds exclusively to Bitcoin. This approach focuses on using secure cold storage wallets and limiting asset sales to times of financial crisis, with legislative approval required.

Nationally, North Carolina’s efforts are part of a larger trend, with similar bills being considered in multiple states. Critics remain wary of crypto’s volatility, while supporters argue that adopting digital assets could provide significant returns. On the federal level, recent actions, like the creation of a Strategic Bitcoin Reserve by President Trump, further validate the potential of digital assets as viable investment options for public funds.

The passage of these bills could mark a major shift in how state retirement funds approach digital asset investments, balancing the potential for high returns with the need to manage inherent risks.

Alexander Stefanov