South Dakota Revives Bitcoin Reserve Bill With Up to 10% Allocation Plan

South Dakota lawmakers are once again weighing whether Bitcoin should play a role in the state’s long-term financial strategy.

Republican Representative Logan Manhart has introduced House Bill 1155, reopening a legislative effort to allow public funds to be invested in Bitcoin.

The proposal closely follows a similar initiative that was deferred during the 2025 legislative session, but arrives in a changed political and market environment, where digital assets are increasingly discussed as strategic reserve tools rather than purely speculative instruments.

What HB 1155 would allow

HB 1155 would amend state investment statutes to permit the South Dakota State Investment Council to allocate up to 10% of certain public funds into Bitcoin. Eligible pools include educational and charitable trust funds overseen by the council, rather than operating budgets or pension obligations.

Based on publicly reported fund totals of approximately $16.6 billion as of June 2024, the bill could theoretically authorize Bitcoin exposure exceeding $8 billion, though the legislation does not mandate any specific allocation level. Actual deployment would remain at the discretion of the Investment Council.

The bill frames Bitcoin as a strategic asset rather than a trading position, with Representative Manhart promoting the concept under the slogan “Strong money. Strong state,” and positioning Bitcoin as a hedge against long-term inflation and currency debasement.

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Custody and governance requirements

A central feature of HB 1155 is its emphasis on security and institutional-grade custody. The proposal requires that private keys be exclusively controlled by the State Investment Council, eliminating reliance on third-party custodians for key management.

Storage would need to be hardware-secured and distributed across at least two geographically separate locations, reducing single-point-of-failure risk. In addition, the bill mandates multi-party approval structures for transactions and regular third-party code audits, embedding governance controls more commonly seen in institutional digital asset frameworks.

These provisions are designed to address operational and political concerns around custody risk, which have historically been a major obstacle for public-sector crypto adoption.

Broader state and national context

South Dakota’s renewed push places it alongside a growing list of U.S. states exploring Bitcoin-related legislation. Jurisdictions including Texas, Ohio, Pennsylvania, and New Hampshire have introduced measures ranging from treasury investment authorization to broader digital asset integration strategies.

Within South Dakota itself, HB 1155 is part of a wider legislative focus on cryptocurrency in 2026. Lawmakers have also advanced Senate Bill 98, a bipartisan effort introduced in January aimed at reducing fraud linked to cryptocurrency kiosks, commonly referred to as crypto ATMs.

Separately, the state Attorney General has proposed amendments to seizure laws to explicitly include digital currency, enabling law enforcement to confiscate crypto assets connected to criminal investigations.

Structural takeaway

HB 1155 does not compel South Dakota to buy Bitcoin, but it would remove a key legal barrier preventing public funds from doing so. By combining a high theoretical allocation ceiling with strict custody and governance rules, the bill reflects a cautious but increasingly strategic view of digital assets at the state level.

If advanced, the proposal would test whether Bitcoin is moving from a political talking point into a legitimate reserve consideration for U.S. state treasuries, marking another step in the normalization of digital assets within public finance frameworks.

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