Main Points:
- Strategic Bitcoin Reserve: North Carolina state legislators have introduced Senate Bill 327 (SB327), which proposes that up to 10% of public funds be invested in Bitcoin as part of a broader “financial innovation strategy.”
- Enhanced Financial Strategy: The bill empowers the state treasurer to pursue various investment strategies—including staking, lending, and other yield-generating activities—using Bitcoin, and even contemplates mining operations to acquire additional coins under favorable market conditions via regulated US exchanges.
- Strict Sale Conditions and Transparency: Bitcoin sales would require a two-thirds majority approval by both chambers of the state legislature and be limited to specific situations such as addressing severe financial crises or funding key infrastructure projects. The state treasurer must also submit detailed quarterly reports on the reserve to the legislature, which will be publicly accessible.
- Broader Trend in the US: This initiative is part of a larger national trend—with bills proposed in over a dozen states—aimed at creating state-level Bitcoin reserves. For instance, similar measures have been introduced in Minnesota (the “Minnesota Bitcoin Act”) and via a bill (HB92) in the North Carolina House to allow state investments in Bitcoin ETFs.
1. Introducing the Strategic Bitcoin Reserve Bill
On March 18, North Carolina state legislators—Republican Senators Todd Johnson, Brad Overcash, and Timothy Moffitt—introduced Senate Bill 327 (SB327) to establish a strategic Bitcoin reserve. As a key component of the state’s “financial innovation strategy,” the bill proposes allocating up to 10% of public funds to Bitcoin investments. This initiative is designed to position North Carolina as a leader in cryptocurrency adoption at the state level.
2. Empowering the State Treasurer with Investment Authority
Under SB327, the state treasurer will have the authority to implement various strategies for managing the Bitcoin reserve. These strategies include:
- Staking and Lending: Generating additional yield from Bitcoin holdings.
- Strategic Bulk Purchases: Taking advantage of favorable market conditions through large-scale acquisitions via regulated US exchanges.
- Mining Operations: Exploring the feasibility of mining to further increase the state’s Bitcoin holdings, all while minimizing costs.
3. Rigorous Sale Controls and Transparency Measures
The bill stipulates that any decision to sell Bitcoin from the reserve must receive at least a two-thirds majority approval from both chambers of the state legislature. Sales are restricted to critical situations—such as addressing a severe financial crisis, executing part of a predetermined investment plan, or funding major infrastructure or economic development projects. Additionally, the state treasurer is required to provide a detailed quarterly report on the reserve’s status to the legislature, with the information also published on an official website to ensure transparency.
4. A Piece of a National Movement
North Carolina’s SB327 is part of a broader movement across the United States. According to the Bitcoin Reserve Monitor, over 12 states have introduced bills aimed at creating state-level Bitcoin reserves. While some states—such as Wyoming and Montana—have seen similar proposals rejected, North Carolina’s initiative reflects an increasing willingness among lawmakers to explore innovative financial strategies. Moreover, a concurrent House bill (HB92) in North Carolina would permit public funds and retirement funds to invest up to 10% in Bitcoin ETFs, further signaling the state’s commitment to integrating digital assets into its financial planning.
5. Pioneering Financial Innovation
North Carolina’s proposed bill represents a significant step toward embracing digital assets within the public sector. By allocating up to 10% of public funds to Bitcoin, the state aims not only to boost its long-term financial strategy but also to set an example for other states exploring similar initiatives. With strict controls on Bitcoin sales and a commitment to transparency, this strategic reserve could enhance public trust and potentially lower capital costs through innovative investment approaches. As the national conversation around state-level cryptocurrency adoption continues to evolve, North Carolina’s move may well pave the way for broader acceptance and integration of digital assets in government finance.
