Introduction
Imagine your retirement savings tied to the volatile world of Bitcoin or other cryptocurrencies. In North Carolina, this scenario is edging closer to reality. In March 2025, lawmakers introduced House Bill 506 (HB 506) and Senate Bill 709 (SB 709), proposing to allocate up to 5% of certain pension funds to digital assets while establishing an independent investment authority. These bills follow earlier proposals, HB 92 and SB 327, which also aimed to integrate Bitcoin into state investments. What could this mean for North Carolina residents and the state’s financial future? Let’s explore the details, opportunities, and risks of this bold move.
HB 506 and SB 709: A New Frontier for Crypto Investment
Key Provisions of HB 506 and SB 709
On March 24 and 25, 2025, North Carolina lawmakers introduced HB 506, led by Representative Brenden Jones, and its Senate counterpart, SB 709. Both bills propose allocating up to 5% of certain state pension funds to digital assets, including cryptocurrencies like Bitcoin, stablecoins, and NFTs. A key element is the creation of the North Carolina Investment Authority, an independent body under the state Treasury tasked with evaluating and managing these investments. Unlike similar legislation in other states, these bills do not impose market capitalization thresholds for eligible digital assets, broadening the scope to include a diverse range of cryptocurrencies.
The new authority is required to assess the risk-reward profile of each asset and ensure secure custody, reflecting a cautious approach to navigating the crypto market’s volatility. This development aligns with a growing trend across U.S. states, such as Indiana and Kansas, which have also explored crypto investments for public pension funds, often through Bitcoin ETFs.
Comparison with HB 92 and SB 327
Earlier in 2025, North Carolina introduced HB 92 on February 10 and SB 327 on March 18, laying the groundwork for crypto investments. HB 92, known as the North Carolina Digital Assets Investments Act, allows the State Treasurer to invest up to 10% of various state funds, including pensions, in Bitcoin exchange-traded products (ETFs), with a requirement that eligible assets have an average market cap of at least $750 billion over the prior 12 months—effectively limiting investments to Bitcoin. SB 327, the Bitcoin Reserve and Investment Act, mirrors this 10% cap but proposes storing Bitcoin in a multi-signature cold wallet, emphasizing long-term holding over trading.
In contrast, HB 506 and SB 709 reduce the allocation cap to 5% and shift oversight from the State Treasurer to the North Carolina Investment Authority. This change aims to professionalize the investment process, potentially mitigating risks associated with the crypto market’s volatility. The table below summarizes the differences:
| Bill | Allocation Percentage | Filing Date | Management Authority |
|---|---|---|---|
| HB 92 | 10% | Feb 10, 2025 | State Treasurer |
| SB 327 | 10% | Mar 18, 2025 | State Treasurer |
| HB 506 | 5% | Mar 24, 2025 | North Carolina Investment Authority |
| SB 709 | 5% | Mar 25, 2025 | North Carolina Investment Authority |
Why North Carolina Is Embracing Cryptocurrency
Potential for High Returns
Bitcoin’s price trajectory over the past decade—from mere cents to $83,000 as of early March 2025—has caught the attention of lawmakers like House Speaker Destin Hall. With North Carolina’s pension funds managing $127 billion in retirement systems and $9.6 billion in reserve funds, a 5% allocation could translate to roughly $6.8 billion in potential crypto investments. Supporters argue that even modest gains could help address long-term funding challenges for pensions, especially as traditional investments face pressure from inflation and economic uncertainty.
Global Trends and Political Influence
North Carolina’s move mirrors a broader global trend, with states like Indiana and Kansas proposing similar crypto allocations for pensions. The crypto industry’s significant political influence—spending over $100 million on U.S. campaigns in 2024—has also played a role. House Speaker Destin Hall, a key advocate, has emphasized the potential for North Carolina to lead in technological innovation, aligning with national sentiments boosted by figures like President Trump, who has promoted a U.S. “strategic reserve” of crypto assets. This political momentum, combined with institutional adoption, has created a favorable environment for such legislation.
Risks and Challenges of Crypto in Pension Funds
Volatility and Security Concerns
Cryptocurrencies are notorious for their price volatility. Bitcoin, for instance, dropped over 6% to $85,270 on April 2, 2025, following the U.S. tariff announcement, and earlier in the year fell from a January peak of $109,114.88 to $88,000 due to profit-taking. The State Employees Association of North Carolina (SEANC) has voiced strong concerns, with lobbyist Flint Benson calling Bitcoin a “roller coaster” unfit for retirees’ pensions. Beyond price swings, security risks—such as wallet hacks or exchange failures—pose significant threats. While HB 506 and SB 709 mandate secure custody solutions, the crypto market’s history of breaches, like the 2022 FTX collapse, underscores the challenges of safeguarding digital assets.
Political and Legislative Pushback
Despite Republican support, the bills have faced resistance. Some lawmakers, including Senate leader Phil Berger, advocate for more thorough evaluation before proceeding, reflecting broader skepticism about crypto’s stability. Initial hesitancy in the House Commerce Committee in early March 2025 was overcome only after pressure from Hall, who attended the meeting to rally support. Democratic lawmakers and critics argue that the volatility and regulatory uncertainty of crypto could endanger retirees’ financial security, especially given the lack of a Bitcoin reserve mandate in HB 506 and SB 709, unlike proposals in states like Texas or Arizona.
Impact on Residents and the Future of Pension Funds
Potential Benefits for Retirees
If successful, these bills could enhance pension fund returns, helping North Carolina retirees keep pace with inflation. A diversified portfolio that includes high-growth assets like Bitcoin might ensure the long-term sustainability of the state’s retirement systems, a goal Hall and supporters emphasize. With Bitcoin’s decade-long growth—its market cap reaching $1.56 trillion by March 2025—the potential upside is significant, even with a conservative 5% allocation.
Redefining Public Investment Strategies
North Carolina’s experiment could set a precedent for other states. A successful implementation might encourage broader adoption of crypto in public finance, signaling a shift toward modernizing investment strategies. However, failure—such as a market crash impacting pension funds—could deter other states and reinforce skepticism about crypto’s role in institutional portfolios. The outcome will likely influence national debates on balancing innovation with financial stability.
Critical Perspective: A Risky Gamble or a Visionary Move?
While the promise of high returns is enticing, the risks cannot be ignored. Critics argue that tying pension funds to a speculative asset like Bitcoin is reckless, especially given retirees’ reliance on stable income. The crypto market’s energy intensity—Bitcoin mining consumes more electricity than some small countries—also raises environmental concerns, a point skeptics have highlighted. Moreover, the bills’ reliance on an executive-driven authority, rather than legislative oversight, introduces governance risks, particularly if political priorities shift under a future administration. On the other hand, proponents see this as a forward-thinking step, leveraging blockchain’s potential to diversify and future-proof public investments in an increasingly digital economy.
Conclusion
North Carolina’s legislative push—through HB 92, SB 327, HB 506, and SB 709—marks a significant step toward integrating cryptocurrency into pension funds. These bills offer a potential lifeline for underfunded pensions but come with substantial risks due to crypto’s volatility, security challenges, and political uncertainties. Whether this move proves to be a visionary leap or a financial misstep remains to be seen. What’s your take on blending Bitcoin with pension funds? Share your thoughts as North Carolina navigates this uncharted territory, and keep an eye on how these laws evolve in the coming months.