South Carolina has introduced a bill aimed at creating a state-controlled Bitcoin reserve as a means to protect state funds from inflation and economic volatility.
Establishment of Bitcoin Reserve
The new legislation, called the Strategic Digital Assets Reserve Act, was filed on March 27. It authorizes the state treasurer to hold and manage digital assets, including Bitcoin. Under the bill, total Bitcoin holdings cannot exceed 1 million BTC, and digital assets are capped at 10% of the state's total funds under management. This move is prompted by concerns about inflation affecting the value of state-controlled and retirement funds.
Funding and Security
If passed, the state treasurer would be permitted to allocate unused or uncommitted state funds, including those from the General Fund and Budget Stabilization Reserve Fund, toward the digital reserve. Assets would be stored using cold wallets or certified custodians to adhere to strict security standards. The legislation also mandates measures for public accountability through the publication of the public addresses of all digital asset holdings.
Citizen Involvement and Future Plans
In addition to state-managed funds, the proposal allows South Carolina residents to voluntarily contribute digital assets to the reserve. This could enhance state holdings and increase local engagement in digital finance. On the same day, South Carolina dismissed its lawsuit against Coinbase staking services, potentially signaling a shift in their approach to crypto regulation.
The bill reflects South Carolina's initiative to integrate cryptocurrencies into the state's financial strategies, marking a step toward broader adoption of digital assets for economic protection.
