South Dakota Representative Logan Manhart has recently taken steps to integrate Bitcoin (BTC) into the state’s overall investment strategy. On January 30, Manhart proposed two new legislative pieces, namely House Bill 1202 (HB 1202) and House Concurrent Resolution 6006 (HCR 6006).
HB 1202 proposes to permit the allocation of 10% of the state’s public funds to Bitcoin. As it stands, South Dakota funds amounted to $16.6 billion as of June 30, 2024. This significant figure would allow for a potential state investment in Bitcoin of over $8 billion. HB 1202 also outlines that only qualified institutions, such as a federally or state-chartered bank or trust company, would be permitted to have custody of the acquired Bitcoin.
Further to this, the bill also suggests that state funds could be invested through an exchange-traded product (ETP) regulated by the US Securities and Exchange Commission, the Commodity Futures Trading Commission, or the South Dakota Division of Banking.
To ensure secure handling, the bill mandates the establishment of multi-party governance structures, encrypted storage environments, and geographically distributed secure data centers for the management of private keys.
The second piece of legislation, HCR 6006, encourages the State Investment Council to consider Bitcoin as a strategic hedge against inflation and economic uncertainty. The resolution recognizes Bitcoin’s $1 trillion market capitalization, its growing role as an international medium of exchange, and its inclusion in the treasury reserves of sovereign nations, including the U.S.
Manhart initially promised to introduce the legislation for a Bitcoin reserve on Jan. 28, making South Dakota the 13th US state to pass legislation for a strategic Bitcoin reserve. According to Dennis Porter, co-founder, and CEO of the Satoshi Action Fund, 15 states will soon introduce similar bills, with Pennsylvania, Texas, Ohio, New Hampshire, and North Dakota already having seen Bitcoin reserve bills introduced.
Kentucky Representative TJ Roberts has promised to introduce a Bitcoin reserve bill in the first week of his return to the General Assembly, which would leave only one state remaining to fulfill Porter’s prediction.
These legislative proposals by Representative Manhart represent a significant shift in the perception and utilization of digital currencies by state governments. By incorporating Bitcoin into investment strategies, South Dakota is positioning itself at the forefront of this financial evolution.
