This week, North Carolina introduced a new bill that would place up to 10% of key state funds in Bitcoin and other cryptocurrencies. It is now the latest state mulling a strategic Bitcoin reserve after President Donald Trump announced his administration’s plans to create a national stockpile of cryptocurrency last year.

While the executive branch is in the embryonic stages of exploring a potential stockpile, more than a dozen states across the country are racing ahead with key strategic Bitcoin reserve bills.

The newest bill, North Carolina’s House Bill 92, allows the Tar Heel State to include crypto in its investment strategy, but any crypto included must have an average market cap of at least $750 billion. This high threshold virtually guarantees that Bitcoin will be the reserve's sole cryptocurrency.

Proponents of a strategic Bitcoin reserve argue that it could help minimize inflation by serving as an alternative to fiat currency and potentially stabilize markets during periods of uncertainty.

"With the U.S. dollar facing periods of inflation and devaluation, it is prudent to explore this new breed of assets which can offer a viable hedge against inflation,” said North Carolina State Representative Mark Brody.

Meanwhile, the Trump administration issued an executive order last month kickstarting a working group to evaluate the feasibility of a national crypto stockpile. However, the assessment of this stockpile is still in the early stages, and no details on its future adoption have been released.

Last week, Utah’s House of Representatives greenlit its own bill for a strategic Bitcoin reserve. The bill is pending a Senate vote, but the state already seems to be a frontrunner in the national race to establish a strategic Bitcoin reserve.

Industry experts, however, are urging caution on strategic Bitcoin reserves:

“Government reserves are intended to ensure the financial health of their jurisdiction and provide a mitigant to jolts in the financial markets,” said Adam Levine, CEO of Fireblocks Trust Company and SVP, Corporate Development & Partnerships at Fireblocks, a crypto infrastructure firm. “The top priority must be leveraging the safest solution to preserve their Bitcoin reserves.”

“Most governments today lack the depth of experience needed to operate digital assets,” Levine said. He pointed out that without a robust security and custodial plan, states are potentially “putting hundreds of millions of taxpayer dollars at risk.”