North Carolina lawmakers are considering investments in Bitcoin and gold as a way to bolster the southern state’s coffers, passing a bill on Wednesday that would fund a study digital assets and precious metals.
Having cleared North Carolina’s House of Representatives, the bill now advances to the state’s Senate. If it’s approved in the Senate, it would then need to be signed into law by Gov. Roy Cooper. It was introduced in April under the title “State Precious Metals Depository Study.”
“This is step one to eventually try to protect our assets in North Carolina,” state Rep. Mark Brody, the Republican who sponsored the bill, told Decrypt. “A lot of folks in the cryptocurrency world, as well as the precious metal world, know […] the U.S. government is consistently and knowledgeably devaluing its currency.”
Under the bill, the state would assess how holding digital assets and precious metals could help the state’s General Fund—essentially, the state’s bank account—hedge against inflation, reduce portfolio volatility, and yield better returns over time. The bill highlights systematic credit risks as a potential reason to hold Bitcoin and gold.
Part of the study would examine how the state could acquire digital assets and precious metals, hold them securely, and liquidate them. Another element would have the state assess whether a state-administered institution should be created to custody assets like Bitcoin and gold.
Brody said a focus on digital assets was the product of work with Dan Spuller, head of industry affairs at the Blockchain Association, a crypto industry advocacy group. Earlier this month, Spuller testified before state lawmakers, advocating for digital assets’ inclusion in the study.
“The original bill was actually to do an appropriation to buy gold,” Brody said. “As we started talking about it, a lot of people just didn’t know enough to make a decision, so that’s why the study is starting first.”
Brody previously co-sponsored a bill outlawing payments made with central bank digital currency (CBDC) in the state. That bill was passed by North Carolina’s House in May and made it one of several states to take steps towards joining Florida in its ban.
All 67 Republican members present in the House on Wednesday voted in favor of the bill to study Bitcoin and gold, while six Democrats also gave a nod of approval. A majority of Democrats, however, opposed the initiative with 40 negative votes.
The bill would set aside $50,000 to conduct the study, where its findings and any policy recommendations would be reported back to the state’s Joint Legislative Commission on Governmental Operations at the start of next year.
“I encourage us to move forward on this,” Brody said. “Are we going to watch [the state’s reserve surplus] fade away into inflation or take some of it and preserve it into an asset that will keep up on a regular basis with inflation?”
While North Carolina appears poised to explore Bitcoin on the state level, people have recently pushed back against Bitcoin in North Carolina’s Buncombe County. A moratorium on Bitcoin mining was floated in April and was passed a month later.