New South Carolina Bill Would Allow State Treasurer to Invest 10% of State Funds in Bitcoin

A recently proposed bill in South Carolina’s House of Representatives is making waves by offering the State Treasurer the opportunity to invest up to 10% of the state’s funds into digital assets, such as bitcoin. This proposed legislation, known as The “Strategic Digital Assets Reserve Act Of South Carolina”, would allow for the creation of a Strategic Digital Assets Reserve, capable of holding as much as one million bitcoin.

The rationale behind this bill is rooted in the recognition that the current economic landscape, marred by inflation and economic volatility, has diminished the purchasing power of the state’s assets. The proponents of this bill argue that digital assets, particularly bitcoin, offer a unique opportunity to hedge against such issues and provide a safeguard for the state’s financial stability.

One key element of the bill is the absence of a mandate regarding the custody of the acquired digital assets. While it does not specify whether state officials should retain the private keys to these assets, the bill empowers the State Treasurer to craft policies and protocols aimed at safeguarding the assets within the reserve. This may include measures such as cold storage or enlisting a third-party custodian to oversee the assets’ security.

In addition, the bill grants the State Treasurer the authority to enlist the aid of third-party entities in the creation, maintenance, and management of the reserve’s security measures. This collaboration with external parties is intended to bolster the robustness of the security infrastructure surrounding the digital assets held in the reserve.

Should this bill be enacted into law, the State Treasurer would assume the responsibility of formulating a comprehensive plan for the reserve. This plan would likely encompass strategies for the acquisition, management, and security of the digital assets within the reserve, ensuring that the state’s investment in digital assets is executed with prudence and foresight.

Overall, the proposed bill represents a bold step towards integrating digital assets, particularly bitcoin, into the state’s financial strategy. By embracing the potential benefits offered by digital assets as a hedge against inflation and economic instability, South Carolina’s lawmakers are positioning the state to adapt to the rapidly evolving financial landscape. If passed, this legislation could pave the way for other states to explore similar avenues for diversifying their financial portfolios and safeguarding against economic uncertainties.