(Bloomberg) -- U.S. state and local governments are growing more interested in investing in cryptocurrencies in their pension funds and accepting digital currencies as payments for taxes and services, according to S&P Global Ratings. 

On the investment side, the outsized returns that cryptocurrencies have generated during a period of low bond yields have made some pension plans more interested, according to S&P’s Sept. 15 note. Over the 12 months ended Aug. 20, Bitcoin and Ethereum have had respective returns of 326% and 745%, S&P analysts wrote. 

While these returns can fluctuate wildly -- in 2018 Bitcoin fell around 75% -- recent gains may make the digital currencies hard for pensions to ignore, S&P wrote. Investing in crypto can boost a pension’s credit risk, because the cash out value for the currency can change fast, S&P wrote.  

Some public retirement plans have already started investing crypto-related assets. New Jersey’s Common Pension Fund D has small holdings in blockchain and digital holding companies, according to S&P. Two pension plans in Fairfax, Virginia have invested in crypto assets, including digital currencies and related companies.

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For payments, some governments have been exploring or even testing out the technology. In 2018, Ohio began accepting Bitcoin payments for state business levies including sales tax, a program suspended in 2019. The city of Williston, North Dakota, accepts cryptocurrency payments for utility bills. 

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