South Dakota has proposed a bill that will enable the state to invest its government revenues in Bitcoin (BTC), creating a Bitcoin Reserve in the process. The action is part of a rising trend among the U.S. states to adopt the flagship crypto as a reserve asset.
South Dakota Eyes Bitcoin Reserve With New Bill
Rep. Logan Manhart has introduced a bill that proposes that the South Dakota State Investment Council invest in Bitcoin. BTC could end up among other traditional investment options, such as government securities, bonds, and exchange-traded funds, in the state’s portfolio.
The bill further puts a cap of 10% in relation to the amount of available funds the State Investment Council can invest in the flagship crypto. Commenting on the introduction of the bill, Manhart said, “I am proud to say I have released my bill that would allow the State of South Dakota to invest in Bitcoin. Strong money. Strong state.”
The introduction of this bill comes as the U.S. also advances its Strategic Bitcoin Reserve. Trump’s crypto adviser, Patrick Witt, recently confirmed that plans to set up the reserve remain a priority for the current administration.
Security Provisions And Custody Top Priority
Some of the main aspects of the proposal are custody and protection of the digital assets. The bill proposes that the State Investment Council may hold BTC investments either directly through a secure custody solution, through a qualified custodian, or in the form of exchange-traded products (ETPs) on a regulated exchange.
The bill also requires the State Investment Council to have exclusive control over the private keys if it holds BTC directly. There must also be hardware encryption. The Council must also maintain any hardware that contains the private key in at least two geographically diverse, secure data centers.
The bill also proposes implementing multi-party approvals for transactions. Under the proposal, disaster recovery procedures are necessary. Periodic penetration testing and audit are required. House Bill 1155 must go through a committee review before proceeding. If it becomes law, the state could join Texas, which disclosed its Bitcoin investment last year, buying up to $5 million worth of BTC in December.
Furthermore, the proposal in South Dakota follows advances in other U.S. states that are looking to invest in Bitcoin. CoinGape reported that Kansas has introduced a bill to establish a state-managed Bitcoin reserve. The bill proposes that the state use unclaimed digital assets to fund the reserve.
Arizona had also set up a Bitcoin reserve fund last year, using unclaimed digital assets. Instead of liquidating these crypto assets, the state will hold them for up to 3 years.
Source: https://coingape.com/strategic-bitcoin-reserve-south-dakota-introduces-bill-to-invest-in-btc-as-u-s-states-explore-crypto/
