• The North Carolina House of Representatives has passed a bill that includes provisions to investigate the acquisition and potential benefits of Bitcoin and other cryptocurrencies.
• The bill aims to study the benefits of holding Bitcoin as a potential hedge against inflation and much more.
• It is commissioning a $50,000 study for analyzing the expected benefits of deploying a chunk of the General Fund to digital assets.
North Carolina House of Representatives Wants to Spend $50K to Study Benefits of Holding Bitcoin
The North Carolina House of Representatives has passed a bill that includes provisions to investigate the acquisition and potential benefits of Bitcoin and other cryptocurrencies. The legislation received 73 votes in favor, 40 against, while seven participants were absent. It has now been referred to the Senate for further consideration.
Costs & Benefits
The bill is commissioning a $50,000 study for analyzing the expected benefits of deploying a chunk of the General Fund to digital assets, positioning it as an effective hedge against inflation and systemic credit risks. It would also research if such an investment by the state could help reduce overall portfolio volatility and increase portfolio returns over time. Besides exploring these advantages associated with investing in cryptocurrencies, it also looks into various factors such as expenses, profits, and security measures related to different depository options. Examining the feasibility of leveraging a privately managed depository or another state’s depository or setting up its own State-administered depository is also part of this study.
The purpose behind this bill is twofold: firstly to assess whether investing funds in virtual currencies can be beneficial for North Carolina’s economy; secondly, if it does turn out favorable then what are viable methods for securely storing these funds? This involves examining all aspects from costs and reliability through legal issues regarding taxation on crypto holdings.
Risks & Security
This research will also address any possible risks associated with investing in cryptocurrencies such as volatility due to price fluctuations or hacking vulnerabilities related to storage options like exchanges or wallets (online accounts). Additionally, it will look into essential safety measures which needs implementation when storing cryptocurrency funds both physically (like cold storage) as well as digitally (through software).
It remains yet unclear what conclusions will be drawn from this research but if successful, it could lead towards adoption by other states who may consider similar projects in near future too. Moreover even if North Carolina decides not go ahead with large scale investments at least this exercise would provide valuable insights about how this asset class works which ought not be overlooked either way!