North Carolina has taken a significant step toward embracing cryptocurrency with the approval of a groundbreaking bill that could pave the way for government-backed crypto investments. On May 1, 2025, the state’s House of Representatives passed the Digital Assets Investment Act (HB92) by a vote of 71-44. The bill allows the state treasurer to invest up to 5% of its investment funds into digital assets like Bitcoin, but it takes a cautious approach. Rather than directly purchasing cryptocurrencies, the bill permits investment in regulated funds such as Bitcoin mutual funds. These funds will be subject to strict compliance and custody checks, ensuring the safety of state funds and addressing concerns over the volatility of digital assets.

The bill was introduced by Republican House Speaker Destin Hall in February 2025. Its passage represents a shift in how state governments view cryptocurrency, with North Carolina now positioned to explore the potential of digital assets as part of its investment strategy. The law mandates that any digital asset investments must be evaluated by third parties to ensure proper custody and regulatory compliance, mitigating risks associated with the inherent volatility of cryptocurrencies like Bitcoin.

The bill is part of a broader movement at the state level to modernize investment portfolios and increase exposure to emerging financial technologies. Supporters, like Rep. Keith Kidwell, argue that diversifying state investments into digital assets is a prudent strategy. Kidwell compared the investment approach to the way professional brokers diversify portfolios, noting that a well-rounded approach to investments can help manage risks in an increasingly unpredictable market.

In addition to HB92, North Carolina lawmakers passed a companion bill, the State Investment Modernization Act (HB506), which further signals the state’s desire to remain at the forefront of financial innovation. The passage of both bills demonstrates a strong commitment to exploring the potential of digital assets while balancing concerns about their volatility.

While the bill has garnered significant support, it has not been without its critics. Rep. Maria Cervania, a vocal opponent, expressed concerns about the instability of digital assets like Bitcoin. She questioned whether the state should deepen its commitment to such unpredictable markets, highlighting the potential risks associated with investments in volatile assets. Furthermore, the State Employees Association of North Carolina has voiced opposition, arguing that these investments could put state workers’ benefits at risk.

Despite this opposition, Governor Josh Stein has expressed his support for HB92. He believes that expanding the treasurer’s authority to include digital assets could provide valuable opportunities for the state’s financial future, particularly if cryptocurrencies continue to rise in value. Governor Stein’s endorsement has helped the bill advance, despite the concerns raised by critics.

North Carolina’s legislative move places it among the few states in the U.S. exploring state-backed investments in digital assets. Arizona is another state that has made strides in this direction, having passed two crypto-related bills through both chambers of its legislature. Governor Katie Hobbs is expected to approve the legislation soon, making Arizona one of the first states to officially embrace cryptocurrency as part of its financial strategy.

As the bill now heads to the Senate for further consideration, the debate around the state’s involvement in cryptocurrency is likely to continue. North Carolina’s move reflects a growing trend of state-level adoption of digital assets, even as the federal government remains cautious about cryptocurrency. If the bill is approved, it could mark a significant milestone in the broader acceptance of cryptocurrency by state governments.