Avalon Labs Explores First Bitcoin-Backed Public Debt Fund
Avalon Labs is pioneering efforts to expand bitcoin’s role in the financial sector by exploring a regulated bitcoin-backed public debt fund. According to a post on its official X handle, the initiative aims to create a structured investment vehicle that integrates bitcoin into traditional finance while maintaining regulatory compliance under the SEC’s Regulation A framework.
Regulation A, often called a “mini-IPO” allows companies to raise capital from both accredited and retail investors without undergoing a full SEC registration process. This approach, widely used in real estate investment trusts (REITs) and private funds could offer retail investors secure access to bitcoin-backed financial products.
Avalon Labs envisions bitcoin as a dynamic financial instrument, unlocking defi yield opportunities for a broader audience. By bridging bitcoin lending with regulated investment structures, the firm seeks to lower entry barriers for traditional investors and accelerate the adoption of bitcoin-backed products.
If successfully implemented, this fund could set a precedent for the crypto industry and create new opportunities for mainstream bitcoin investments.
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NC’s Crypto Investment Bill Advances, Bringing Digital Assets Closer to Public Portfolios
North Carolina Speaker of the House Destin Hall and Representatives Stephen Ross, Mark Brody, and Mike Schietzelt introduced House Bill 92, the “NC Digital Assets Investments Act,” on Feb. 12. The bill, which was filed on Feb. 10, passed its first reading on Feb. 12 and was referred to the Committee on Commerce and Economic Development. If deemed favorable, it will advance to the Rules, Calendar, and Operations of the House.
The legislation proposes allowing the State Treasurer to invest in qualifying investments, a move that could integrate cryptocurrency, stablecoins, and other blockchain-based assets into North Carolina’s investment strategy. The bill outlines:
The State Treasurer may invest the cash of the funds … in digital assets that satisfy both of the following requirements.
“(1) The digital assets are an exchange-traded product. (2) The average market capitalization of the digital assets over the preceding 12 months is at least seven hundred fifty billion dollars ($750,000,000,000), as determined by the State Treasurer using a commercially reasonable method,” the bill describes.
Additionally, the bill details:
An investment in digital assets from any of these funds shall not exceed, in the aggregate, ten percent (10%) of the balance of the fund at the time of the investment.
To safeguard these investments, the bill mandates the use of a secure custody solution, requiring that “If the State Treasurer chooses to internally manage any digital assets, the State Treasurer shall use a secure custody solution.” Covered funds include the General Fund, Highway Trust Fund, Teachers’ and State Employees’ Retirement System, and other pension and insurance funds held by the State Treasurer.
If enacted, the State Treasurer will have the option to manage digital asset investments internally or through third-party investment managers with at least $100 million in assets under management. Investment companies must provide annual audited financial statements, unless waived based on a cost-benefit analysis. The bill also allows the Treasurer to enter indemnification agreements, limiting the state’s liability to the amount of investment. Supporters argue the measure modernizes North Carolina’s investment portfolio, while critics may raise concerns over volatility and regulatory uncertainty in the digital asset space.
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20 US States Push Bitcoin Reserve Bills, Potentially Igniting a $23 Billion BTC Buying Frenzy
Lawmakers across 20 U.S. states have introduced bills aimed at establishing bitcoin and digital asset reserves, potentially resulting in significant state-level investment. Matthew Sigel, head of digital assets research at asset management firm Vaneck, shared on social media platform X on Feb. 12:
We analyzed 20 state-level bitcoin reserve bills. If enacted, they could drive $23 billion in buying, or 247K BTC. This sum is independent of any pension fund allocations, likely to rise if legislators move forward.
These bills in Oklahoma, Massachusetts, Wyoming, Ohio, Texas, Utah, North Dakota, Iowa, Illinois, Kentucky, Missouri, Maryland, New Mexico, South Dakota, Montana, New Hampshire, North Carolina, Arizona, Florida, and Pennsylvania propose various levels of bitcoin allocations from general funds, stabilization reserves, and state treasurers’ accounts.
Some states are considering significant investments, with Arizona proposing an estimate of up to $8.7 billion and Florida planning a $3 billion allocation. Missouri has also introduced a bill that could allocate over $1.7 billion to bitcoin. However, not all states have disclosed specific funding amounts, making it difficult to gauge the total market impact, Sigel explained. For instance, North Dakota has an unspecified proposal, while other states like Pennsylvania have already seen their bills fail, he added.
Despite these uncertainties, the Vaneck head of digital assets research noted the potential for even higher investment levels, stating:
This $23B number is potentially conservative, given the lack of details (many of these states are ‘n/a’ with size unknown).
The push for state-level bitcoin reserves signals a growing acceptance of digital assets in government financial planning. While these proposals are still in the legislative process, their passage could introduce billions of dollars into the cryptocurrency market. If pension funds eventually join the initiative, total investment could increase beyond the current estimates.
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