The General Assembly of North Carolina introduced a bill on Monday to authorize the treasurer to invest in qualifying cryptocurrencies. With this move, NC joins 18 other U.S. states that have been putting public money into crypto via various bills.
According to the supporters, investing in potential digital assets will make North Carolina an early adopter of a higher-end technological economy. Also, the positive yields will aid the welfare of the citizens, especially the beneficiaries of the state’s retirement funds.
Beyond the appreciation, this move has made various criticisms, including discussions on the volatility of the crypto market and accusations regarding the lobbying of the rich for the governments. Let’s take a deeper look.
Details Of The North Carolina’s Latest Crypto Bill
The new bill was published by North Carolina’s House of Representatives, with the leadership of the speaker Destin Hall. According to Hall, the investments in promising digital assets will not only generate yields but also position NC as a leader in technological adoption & innovation.
Beyond the cryptocurrencies, the bill identifies ETFs and NFTs as investment funds. Also, there are certain criteria for investments, including the following requirements:
- The market cap of the investment assets in the preceding 12 months should exceed seven hundred fifty billion dollars ($750,000,000,000), which makes BTC the only asset that can be bought at the moment.
- The investment amount should not exceed 10% of the entire balance in the fund at the time of investment. This decreases the risks of losing funds in extreme circumstances.
Why Are The U.S. States Getting Into Crypto?
Several U.S. States had a history of mocking Bitcoin in the previous years. From that position, they have radically shifted to pro-crypto policies primarily due to the repositioning of stands by Donald Trump and other prominent American political figures. The approval of Bitcoin ETFs by the US Securities and Exchange Commission (SEC), and its upcoming cryptocurrency frameworks encourage States to delve into the blockchain realm.
Trump has picked various high-profile crypto enthusiasts into his administration, including the tech giant Elon Musk and former PayPal COO David Sacks, with the promises of making America the “crypto capital of the world.” They are filling the Bitcoin Reserve in every way possible. As of today, 19 states have joined the crypto vision of the President, and we can see more states soon joining.
Is North Carolina’s Move A Smart Investment Or A Risky Bet?
Beyond the demanding technological use cases of blockchain and other logical factors, the crypto market is largely controlled by fear, greed, confidence, anxiety, and stupidity of humans. So, North Carolina, along with other U.S. states, has a serious risk of being rekt. Also, the concern over using public money to invest in volatile assets is an issue.
Risks apart, coins such as Bitcoin can be a great addition to institutions like Governments. If everything goes well, we can see the replacement of traditional gold reserves with a national crypto reserve. However, the possibility of extreme right-wing groups using the states to stockpile cryptocurrencies for their private interests cannot be dismissed.
Also read: Top 5 Cryptos Under $1 That Could 1000X In 2025
Concluding Thoughts
In the near future, we will likely see all the U.S. states having BTC reserves and a clear-cut crypto regulatory framework. An important question is whether the involvement of governments makes crypto less decentralized. In fact, the interest of powerful governments across the globe has made crypto a hybrid asset that comprises both centralization and decentralization.
Considering the previous issues like the crash of Terra Luna, it seems like a better approach is to blend both centralization and decentralization in a parliamentary democratic way.
