North Carolina's $127 billion pension fund considers bitcoin investment proposal
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It's hair-raising, folks! The North Carolina House of Representatives is gearing up to vote on a proposal that could plug a $16 billion pension shortfall by utilizing the state's public funds to buy Bitcoin. Yes, you heard it right – ol' Jack Dorsey's favorite digital coin could be part of North Carolina's pension strategy, as reported by a local regional newspaper.
This sudden crypto twist concerns not just Bitcoin, but also other digital assets like stablecoins and NFTs. The state's hefty pension fund, worth a whopping $129 billion, provides retirement benefits for public servants, from cops to teachers to firefighters, and has more than a million members basking in its benefits.
As things stand, the fund's portfolio primarily consists of public equity, investment-grade fixed income, and real estate, with a smattering of non-traditional alternative investments like private equity. But all that could change if the bill gets a majority vote.
The bill proposes permitting up to 5% of the state's funds to be invested in Bitcoin, with the leading cryptocurrency being the only digital asset that would qualify as an investment, given its market cap exceeds the $750 billion mark. Compared to the original bill, this new one has been tempered, reducing the potential investment allocation from 10% to 5%.
Additionally, the revised bill necessitates the coins to be stored securely via professional custodial services, rather than relying solely on the state treasurer for control. And, in a surprising turn of events, the bill has already managed to garner a simple majority in the House, with 71 lawmakers nodding their approval while 44 voiced their disagreement.
The bill will now move forward to the next stage of the legislative process, raising questions about the potential impact on North Carolina's pension fund and whether this move could set a precedent for other states to follow suit. The North Carolina Senate will likely continue the debate on risk management and fiduciary standards.
Keep a close watch on this evolving news, and let's see if North Carolina seals the deal on crypto pensions!
- The North Carolina House of Representatives is considering a proposal to invest up to 5% of the state's funds in Bitcoin, worth approximately $438 billion based on its current market cap.
- This move, if passed, could represent an abnormal shift in the finance business, with North Carolina potentially becoming one of the first states to incorporate Bitcoin into its pension fund.
- Given the significant pension fund size, worth $129 billion, an imbalance could occur in the technology sector, specifically the crypto market, should the bill receive a majority vote.
- The bill mandates the use of professional custodial services for storing the Bitcoin, rather than relying on the state treasurer, to ensure the security of these funds.
- If the bill goes through, it could lead to North Carolina having the largest pension fund allocation in crypto, which could have wider implications for the crypto market cap and potentially influence other states' financial strategies.
