South Carolina Lawmakers Introduce Strategic Digital Assets Reserve Act
South Carolina lawmakers recently introduced a bill called the Strategic Digital Assets Reserve Act, which aims to allow the state treasurer to invest in Bitcoin and other digital assets up to a certain limit. The bill, also known as H4256, would allocate unused funds from the General Fund and the Budget Stabilization Reserve Fund, as well as other state-managed funds, to cryptocurrencies.
Under the new bill, the maximum investment would be 10% of the total funds managed by the state, not exceeding the limit of one million Bitcoins. These digital assets must be held directly under the custody of the state treasurer or through secure custody solutions managed by qualified custodians, or in exchange-traded products issued by regulated financial institutions. The new legislation expressly prohibits the lending of these digital assets.
The project also highlights that “Bitcoin, as a decentralized digital asset, and other digital assets offer unique properties that can act as a hedge against inflation and economic volatility. It also helps to diversify state funds.”
Additionally, the legislation requires that reports be produced every two years detailing digital assets and their respective values in US dollars. To ensure transparency, the public addresses of all digital assets must be disclosed on the state’s official website, and the state treasurer will be responsible for implementing regular independent testing and audits of the asset management processes.
Another interesting feature of the bill is the ability for South Carolina residents to contribute digital asset donations to the reserve through an approved vendor process. If approved, the legislation would be in effect until September 1, 2035.
This move puts South Carolina on the growing list of U.S. states that are investigating the potential of strategic cryptocurrency reserves. To date, 24 of the 50 U.S. states have already introduced similar legislation regarding Bitcoin reserves.
Prior to this, South Carolina lawmakers had already introduced S0163, which focuses on regulating digital assets and aims to prevent government agencies from accepting central bank digital currency payments, as well as allowing the use of cryptocurrencies in specific transactions without mining-related taxes or zoning restrictions. This bill also addresses environmental and noise concerns associated with cryptocurrency mining, while simultaneously promoting rural development through these activities.
At the time of publication, the price of BTC was quoted at US$84,969.19 with a drop of 2% in the last 24 hours.