South Carolina’s House of Representatives has introduced a bill that would allow the state treasurer to establish a Bitcoin reserve as part of a broader effort to hedge against inflation and diversify state funds.
The proposed Strategic Digital Assets Reserve Act, sponsored by Representative Jordan Pace, would permit the state treasurer to invest up to 10% of unencumbered state funds in digital assets, including Bitcoin.
The reserve would be created using funds from the state’s General Fund, Budget Stabilization Reserve Fund, or other investment pools.
According to the bill, the total Bitcoin holdings under the reserve would be capped at one million Bitcoins, with digital assets representing no more than 3% of the state’s total investment portfolio.
“Bitcoin and other digital assets offer unique properties that can act as a hedge against inflation and economic volatility,” the bill stated. “South Carolina should have access to digital assets to protect against inflation and diversify its portfolio.”
The treasurer would be authorized to hold Bitcoin using secure custody solutions, including cold storage. Additionally, the state may invest in Bitcoin through regulated exchange-traded products or hold digital assets with qualified custodians.
To ensure transparency, the bill requires the state treasurer to publish the public addresses of the Bitcoin reserve on an official government website. However, private keys and sensitive security information will remain confidential.
The legislation also allows South Carolinians to donate Bitcoin and other digital assets to the reserve, promoting a sense of shared ownership. The treasurer would be tasked with developing a donation process with approved vendors.
The bill mandates biennial reports on the value of the digital asset reserve and independent audits to ensure compliance with security protocols. Independent testing will cover custody solutions, blockchain verifications, and fraud prevention measures.
If approved, the act will remain in effect until September 1, 2035.
South Carolina is joining a growing number of U.S. states exploring digital asset investments. While some states have considered cryptocurrency for payments and tax purposes, establishing a Bitcoin reserve would mark a significant shift in state-level financial management.
