The North Carolina House of Representatives has approved a bill commissioning a $50,000 study to examine the acquisition, safe storage, insurance and liquidation of “gold bullion and cryptocurrencies” such as bitcoin.

The study will investigate the potential impact of holding some of North Carolina’s funds in cryptocurrencies and gold, and how holdings of gold and cryptocurrencies might affect the state’s financial landscape.

The bill, which passed with a majority vote, was designed to explore whether such holdings could be a hedge against inflation and systemic credit risk, and whether gold and cryptocurrencies could reduce volatility and enhance investment returns on national portfolios. The research comes as a growing number of government entities are considering the potential benefits and risks associated with digital assets and alternative forms of investment.

Supporters of the bill argue that diversifying national portfolios to include cryptocurrencies and gold could provide insurance against traditional market volatility and serve as a potential inflation hedge.

They argue that cryptocurrencies, with their decentralized nature and limited supply, can provide a reliable store of value during times of economic uncertainty. Additionally, the study aims to assess the viability of cryptocurrencies as a means of payment, taking into account factors such as transaction speed, security and scalability.

However, critics of the bill have raised concerns about the volatility and regulatory challenges associated with the cryptocurrency. They argue that the unpredictability of digital assets could pose additional risks to the country’s financial stability.

Additionally, skeptics question the long-term stability of cryptocurrencies and highlight the lack of a comprehensive regulatory framework, which could expose countries to vulnerability and financial loss.

The commissioned study will be conducted by independent experts in economics and finance who will assess the potential benefits and risks of holding cryptocurrencies and gold as part of North Carolina’s financial strategy. The findings of the study will provide lawmakers with valuable insights to make informed decisions on national investment policy.

With the continuous development of the global financial landscape, digital currencies are getting more and more attention, and traditional investment strategies are facing new challenges. Governments around the world are exploring the potential of cryptocurrencies and alternative assets. By studying the implications of holding cryptocurrencies and gold, North Carolina seeks to position itself at the forefront of financial innovation while ensuring the safety and stability of its financial resources.

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Filed under: Bitcoin - @ June 30, 2023 2:03 am