Key dealers
- South Carolina has proposed a bill to allow state investments in bitcoin and other digital assets with a hat of one million bitcoins.
- The proposed legislation requires secure custody, openness and regular reviews of digital assets.
South Carolina legislator on Thursday introduced “Strategic Digital Assets Reserve Act”, a bill that would enable the Treasury to invest in Bitcoin and other digital assets up to specific limits.
The bill, even known as H4256allows the Treasury to invest unexpected funds from General Fund, Budget Stabilization Reserve Fund and other state -managed investment funds in digital assets.
Investments would be limited to 10% of total funds under management, with a maximum bitcoin reserve limit of one million bitcoins.
Under the proposed legislation, digital assets must be held either directly by the Treasury by a secure custody solution, by a qualified guardian or in exchange -traded products issued by regulated financial institutions. The bill prohibits the lending of digital assets.
“Bitcoin, as a decentralized digital asset, and other digital assets offers unique properties that can act as a hedge against inflation and economic volatility. It also helps diversify the state’s funds,” says the bill.
The legislation requires two -year reporting of digital assets and their USD value.
For openness, the public addresses for all digital assets must be published on an official government website. The state treasurer must also carry out regular independent testing and auditing of digital asset management processes.
The bill allows South Carolina residents to make donations of digital assets to the reserve through an approved supplier process. If assumed, the legislation would remain in force until September 1, 2035.
With this feature, South Carolina joins a growing list of US states that investigate the establishment of strategic crypto reserves. Currently, 24 out of 50 US states have introduced Bitcoin Reserve bills, according to Bitcoin Law.
Before H4256 introduced legislators in South Carolina S0163, a bill with a focus on digital asset regulation. This bill aims to prevent government agencies from accepting or demanding central bank digital currency (CBDC).
It would also enable the use of digital assets for transactions without specific crypto mining taxes or zone limits.
Furthermore, S0163 dealt with Cryptocurrency mines such as energy use and noise, while trying to promote rural development through mining operations.
