State lawmakers hesitate to invest NC pension plan in Bitcoin despite proposed bill.
State lawmakers in North Carolina are considering a bill that would permit the investment of state funds, including pensions, in cryptocurrency. This move has sparked a debate among lawmakers, with some advocating for the potential growth opportunities while others voice concerns about the risks involved.
The proposed House Bill 92 aims to give the State Treasurer the authority to allocate billions of dollars from the State Pension Plan and other government accounts into cryptocurrency. Despite the bill being temporarily shelved by the House Commerce Committee, the discussion surrounding the implications of such an investment remains heated.
Advocates argue that investing in cryptocurrency could potentially yield significant profits for the pension fund, banking on the continued growth of the market. However, critics, such as the State Employees Association of North Carolina, caution against jeopardizing the security of state worker pensions by delving into volatile and speculative investments like cryptocurrency.
The bill, if passed, would allow various state investment funds, including the pension plan and the Highway Trust Fund, to allocate up to 10% of their assets into cryptocurrency. The State Pension Plan, which holds billions of dollars, is of particular interest and concern due to the substantial impact such an investment could have on retirees’ future benefits.
Many state employees opt for government jobs despite lower wages compared to the private sector, largely enticed by the promise of a secure pension upon retirement. Hence, diverting pension funds into unstable markets like cryptocurrency could put the financial well-being of retirees at risk. Flint Benson, representing the SEANC, highlighted the disapproval among state employees and retirees regarding the proposed investment in cryptocurrency, emphasizing the currency’s inherent volatility.
While Bitcoin, the most prominent cryptocurrency, has seen astronomical price fluctuations over the years, some lawmakers argue that the bill incorporates safeguards to minimize risk. By focusing on exchange-traded funds (ETFs) rather than individual currencies like Bitcoin, the proposed legislation aims to mitigate exposure to market volatility and protect the pension fund from substantial losses.
Despite differing opinions on the matter, lawmakers delayed a vote on the bill to allow for further research into cryptocurrency and to receive input from State Treasurer Brad Briner. Concerns about Briner’s limited experience, the complex nature of cryptocurrency, and the current economic climate have also contributed to the decision to postpone a definitive vote.
The divide among lawmakers over the bill extends beyond political affiliations to generational differences. Younger legislators, like House Speaker Destin Hall, advocate for embracing blockchain technology and digital assets as a means of fostering innovation and economic growth. Conversely, older lawmakers approach the issue with caution, highlighting the need for a thorough understanding of cryptocurrency before committing state funds to this emerging market.
As the debate continues, legislators are tasked with weighing the potential benefits of cryptocurrency investments against the inherent risks involved, ensuring that decisions made reflect the best interests of state employees and retirees. Ultimately, the fate of the bill rests on a delicate balance between innovation and prudence, as lawmakers navigate the complexities of cryptocurrency investing in the public sector.
