North Carolina’s new crypto push might change how state pensions work. Last week, state lawmakers moved forward with a plan that could put some pension money into cryptocurrency investments. This move comes as digital money like Bitcoin gains more attention from big investors.
The proposed law would let the state pension fund put a small amount of money into crypto assets. Right now, the North Carolina pension system manages about $111 billion for state workers. The bill passed an important committee vote and now heads to the full Senate for consideration.
State Senator Todd Johnson, who supports the bill, believes crypto investments could help the pension fund grow faster. “We need to look at new ways to make sure our retired teachers and state employees get the best returns possible,” Johnson said during the committee meeting.
The plan would limit crypto investments to just 5% of the total fund. This careful approach aims to balance the possible high returns with the risks that come with digital currencies. The state treasurer would need to follow strict rules when choosing which crypto investments to make.
Some financial experts have praised North Carolina for considering this modern approach. “Traditional investments like stocks and bonds aren’t delivering the returns they once did,” explained Marcus Howard, a finance professor at UNC Charlotte. “Carefully adding some crypto exposure might help boost long-term growth.”
Not everyone supports the idea, though. Critics worry about putting retirement money into something as unpredictable as cryptocurrency. Janet Wilson, who represents the North Carolina Retired Government Employees Association, expressed concerns during public comments. “Our members worked hard for these benefits. We shouldn’t gamble with their retirement security on unproven investments.”
The debate highlights how mainstream cryptocurrency has become. Just a few years ago, the idea of government pension funds investing in Bitcoin would have seemed impossible. Today, even conservative investment managers are considering digital assets as part of a balanced portfolio.
If passed, North Carolina would join a small but growing number of states exploring crypto for their pension systems. Last year, Virginia approved a similar measure allowing up to 3% investment in digital assets. Texas and Wisconsin are also studying potential crypto strategies for their pension funds.
The bill includes important safeguards. Any crypto investments would need approval from investment committees and outside advisors. The state would also hire specialists with experience in digital asset management before putting any money into crypto markets.
Bitcoin, the most well-known cryptocurrency, has had a wild ride in recent years. After reaching nearly $69,000 in November 2021, it fell below $17,000 in late 2022. This year, it has rebounded strongly, recently trading above $60,000. This volatility explains both the attraction and concern around crypto investments.
State Treasurer Dale Folwell has remained neutral on the proposal so far. His office released a statement saying they are “studying all aspects of the legislation and its potential impact on the long-term health of the pension fund.”
The bill still faces several hurdles before becoming law. It needs approval from the full Senate, then the House, before reaching the governor’s desk. If passed, North Carolina would establish a one-year study period before making any actual investments.
For state employees like Mary Jenkins, a nurse at a state hospital for 22 years, the prospect brings mixed feelings. “I understand wanting better returns for our pensions, but I hope they’re very careful,” she said. “Most of us don’t understand how cryptocurrency really works.”
The North Carolina proposal represents a bigger trend of traditional finance slowly embracing digital assets. As cryptocurrency regulation becomes clearer nationwide, more institutional investors may follow this path. For now, North Carolina’s pensioners will be watching closely as lawmakers decide whether their retirement funds will enter the crypto age.
