The North Carolina House of Representatives has passed a bill that calls for a study on the feasibility and benefits of the state holding Bitcoin and other virtual currencies. The study, which would be conducted by the Department of State Treasurer, aims to examine the potential impact, security measures, and custodial options associated with holding digital currencies. This proactive approach showcases North Carolina’s interest in exploring the benefits and risks of virtual currency holdings.
The Study’s Focus
The bill, known as the State Precious Metals Depository Study (House Bill 721), includes provisions to investigate the acquisition and potential benefits of virtual currency, with a specific emphasis on Bitcoin. The study would analyze the advantages of allocating a portion of the state’s General Fund to virtual currency holdings, including as a hedge against inflation and systemic credit risks. It also aims to determine if such holdings can reduce portfolio volatility and increase long-term returns.
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Consideration of Custodial Options
In addition to exploring the benefits of virtual currencies like Bitcoin, the study outlined in the bill recognizes the importance of assessing the costs, benefits, and security measures associated with different depository options. This includes evaluating the feasibility of utilizing privately managed depositories, depositories from other states, or establishing a state-administered depository within North Carolina. The goal is to determine the most suitable custodian and administrator for virtual currency assets held by the state and its agencies.
Bitcoin’s Addition to the Bill
The inclusion of virtual currency and specifically Bitcoin in the legislation highlights the state’s proactive approach to studying digital currencies and their potential benefits. During the bill’s hearing, Dan Spuller, head of industry affairs at the North Carolina Blockchain Initiative, testified on behalf of the Initiative and successfully advocated for the inclusion of language related to Bitcoin. This move demonstrates the Initiative’s ongoing efforts to promote Bitcoin and blockchain technology within the state.
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Next Steps
With the bill’s passage in the North Carolina House of Representatives, it will now proceed to the Senate for further consideration. If approved by both houses, the bill could become law, leading to the commissioning of the study by the Department of State Treasurer. The findings of the study will provide valuable insights into the potential impact and feasibility of the state holding Bitcoin and other virtual currencies as part of its financial strategy.
Conclusion
North Carolina’s pursuit of a study on holding Bitcoin and virtual currencies demonstrates the state’s proactive stance in understanding and exploring the benefits and risks of digital assets. By examining the feasibility, benefits, and custodial options associated with virtual currency holdings, the state aims to make informed decisions regarding the inclusion of Bitcoin in its financial portfolio. As the study progresses and its findings emerge, it will shed light on the potential impact of virtual currency on North Carolina’s financial strategy.
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