- South Carolina may create a Bitcoin reserve with strict storage and transparency rules to address inflation concerns and economic volatility.
- The proposed bill permits up to 1 million BTC holdings, capped at 10% of the total state-managed funds, including voluntary citizen contributions.
- The state treasurer would manage the assets and disclose wallet addresses while using uncommitted funds from key financial reserves.
South Carolina has introduced new legislation aimed at creating a state-controlled Bitcoin reserve. The bill, titled the Strategic Digital Assets Reserve Act, was filed on March 27 and seeks to authorize the state treasurer to hold and manage digital assets, including Bitcoin.
Under the bill, the total Bitcoin holdings cannot exceed 1 million BTC. The act also limits digital assets to 10 percent of the state’s total funds under management. The move follows concerns about inflation affecting the value of state-controlled and retirement funds. Legislators believe that holding Bitcoin may help reduce risk during economic downturns.
Funds to come from uncommitted state resources
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. The assets would be stored using cold wallets or certified custodians to meet strict security standards.
The legislation includes measures for public accountability. The state treasurer would be required to publish the public addresses of all digital asset holdings. This step would allow residents to track and verify transactions directly on the blockchain.
Citizens can contribute digital assets voluntarily
In addition to state-managed funds, the proposal allows South Carolina residents to voluntarily donate digital assets to the reserve. This could further expand the state’s holdings and increase local engagement in digital finance.
The same day brought positive news when South Carolina dismissed its lawsuit against Coinbase staking services, as Coinbase’s Chief Legal Officer Paul Grewal confirmed. The dropping of legal action suggests South Carolina may adopt broader crypto-regulatory policies in the future. Grewal declared that Coinbase users in South Carolina lost $2 million in staking rewards due to the lawsuit.
The bill reflects a broader shift in South Carolina’s approach to digital assets. As the state steps back from restrictive legal actions, it is now exploring ways to integrate cryptocurrency into its financial planning.
