South Carolina has introduced House Bill 4256, allowing the state’s treasury to hold Bitcoin and other digital assets. It is the most recent state to adopt the Strategic Digital Assets Reserve Act.
The legislation allows the state treasurer to use up to 10% of some unspent state funds, such as the General Fund and Budget Stabilization Reserve, for digital asset investments. These reserves would be limited to 1 million Bitcoin.
“The creation of the Digital Assets Reserve will allow the State to own digital assets, including Bitcoin, as a financial asset,” the bill reads. It also notes that such assets “offer unique properties that can act as a hedge against inflation and economic volatility.”
However, it is essential to note that the bill has not been passed yet. The treasurer could hold these assets directly in secure custody or through a qualified custodian or regulated exchange-traded products if passed.
The bill specifically outlaws the lending of digital assets. Transparency is an important part of this proposal, as annual reports will be published publicly to show how much Bitcoin and other digital assets the state holds. The bill also requires the state treasurer to publish all the wallet addresses on the official state website. Independent audits and security testing will also be mandatory.
The bill paves the way for South Carolina residents to donate digital assets through an approved vendor. If adopted, the law would be in effect until Sept. 1, 2035. H4256 follows a similar measure, Senate Bill S0163, which seeks to limit government use of central bank digital currencies (CBDCs) while encouraging the adoption of crypto.
With this move, South Carolina joins the ranks of U.S. states considering the creation of digital asset sovereign reserves. According to Bitcoin Law, 24 states have introduced the Strategic Bitcoin Reserve Bill—Kentucky is the latest state, before South Carolina, to have included a bill for the Strategic Bitcoin Reserve.
At press time, Bitcoin is trading at $84,898.40, as per Kraken’s price feed. The current price is down by 2.34% in the last 24 hours.
