Crypto Allocation Proposed for NC Pension Funds: Up to 5% of Balance

North Carolina is now among the American states considering crypto investments for public pension funds, as lawmakers propose two bills allowing up to 5% of specific funds to be allocated to digital assets.

Two separate bills have been introduced by North Carolina lawmakers to permit an independent investment authority to allocate as much as 5% of certain pension funds to digital assets, including cryptocurrencies, stablecoins, and NFTs, provided they employ secure custody solutions and evaluate the related risks.

Representative Brenden Jones introduced the first bill, House Bill 506, while Senate Bill 709 was presented to the Senate. By introducing the bills in both legislative chambers, lawmakers enhance the likelihood that at least one version will be approved and become law.

Both bills seek to establish an "Investment Authority" that will function independently of the State Treasurer and oversee investments for various state retirement funds.

This development reflects a growing trend in which multiple U.S. states are enacting legislation to enable public pension funds to invest in digital assets, primarily through exchange-traded funds. Earlier this year, Indiana introduced House Bill 1322, permitting state-managed pension funds to invest in approved Bitcoin (BTC) ETFs. Around the same time, Kansas suggested legislation that would enable the Kansas Public Employees Retirement System to allocate up to 10% of its funds to Bitcoin-backed products, such as spot Bitcoin ETFs. Similarly, Republican lawmakers in Florida introduced bills that would empower the state's Chief Financial Officer to invest up to 10% of certain public funds, including retirement funds, in BTC and other digital assets.

This trend is not limited to the U.S., as pension funds in other countries are also increasing their exposure to cryptocurrencies. Australian pension funds have been among the early adopters, with self-managed superannuation funds increasing their cryptocurrency investments to $664 million by 2023. Most recently, Norway's Government Pension Fund has indirectly invested in cryptocurrencies by acquiring shares in MicroStrategy, Marathon Digital Holdings Coinbase, and Block Inc.—all of which hold Bitcoin on their balance sheets.