A recent legislative proposal in South Carolina aims to establish a state-managed Bitcoin reserve, limited to 1 million BTC.
Introduced on March 27, the Strategic Digital Assets Reserve Act seeks to empower the state treasurer to hold Bitcoin (BTC) and other digital currencies as a countermeasure to inflation. The legislation highlights that inflation has diminished the purchasing strength of retirement accounts and state-controlled assets.
To enhance its financial security, South Carolina intends to broaden its investment approach. Bitcoin is regarded as a potential safeguard against economic fluctuations. The proposed Digital Assets Reserve would not only allow the state to own and supervise Bitcoin but would also enable residents to voluntarily contribute digital assets.
The bill establishes specific investment protocols, mandating secure storage through cold wallets or licensed custodians and capping the total amount of digital assets at 10% of the overall funds under management. Furthermore, the state is permitted to hold no more than 1 million BTC.
If approved, South Carolina’s state treasurer would have the authority to invest unused or unallocated funds from sources such as the General Fund and the Budget Stabilization Reserve Fund into this reserve. To ensure transparency, the treasurer must disclose the public addresses of the reserve’s holdings, allowing citizens to verify transactions.
This proposal emerges as South Carolina shifts its approach to cryptocurrency regulation. On March 27, the chief legal officer at Coinbase announced on X that the state had dropped its lawsuit against the company’s staking services, thus allowing the platform to reintroduce staking for local users.
The chief legal officer highlighted that South Carolina users had lost nearly $2 million in staking rewards due to the legal dispute and hailed the lawsuit’s dismissal as a triumph for consumer rights. He emphasized that 52 million Americans own cryptocurrency and require clear regulations and protections. He commended South Carolina for its decision and expressed hope that other states with staking prohibitions would follow suit.