South Dakota Lawmaker Revives Bill to Permit State Bitcoin Investment

South Dakota Lawmaker Revives Bill to Allow State Bitcoin Investment

A South Dakota lawmaker has reintroduced a bill that aims to allow the state to invest a portion of its public funds in Bitcoin. This proposal comes after a similar initiative did not progress during the previous legislative session.

Key Takeaways:

A new bill in South Dakota could enable the state to invest up to 10% of eligible public funds in Bitcoin using various exposure methods.
The plan includes stringent custody and security measures for any Bitcoin held by the state.
This effort is part of a growing trend among US states exploring strategies for Bitcoin-backed reserves.

Representative Logan Manhart, a Republican, introduced House Bill 1155 on Tuesday, which seeks to modify South Dakota’s public investment laws to allow the State Investment Council to direct up to 10% of state funds into Bitcoin.

The bill would facilitate investment through direct Bitcoin holdings, qualified custodians, or regulated exchange-traded products.

South Dakota Bitcoin Bill Implements Strong Custody and Security Measures

Manhart expressed pride in reintroducing this bill, stating, “I am proud to say I have released my bill that would allow the State of South Dakota to invest in Bitcoin. Strong money. Strong state.”

The legislation proposes strict custody and security protocols for any Bitcoin that the state may hold. These requirements include:

Exclusive control over private keys
Encrypted hardware storage
Secure facilities distributed across different locations
Multi-party governance mechanisms
Regular security audits

House Bill 1155 has been read for the first time and sent to the Committee on Commerce and Energy, as per the official legislative journal.

This effort closely mirrors House Bill 1202, which Manhart proposed during the 2025 legislative session. That earlier bill aimed to add Bitcoin to permissible state investments, but it did not proceed due to time limits set by South Dakota’s legislative session.

The revival of this initiative is notable as interest in Bitcoin-backed reserves is growing among US states. Similar proposals have been advanced by lawmakers in Kansas and Florida, while jurisdictions such as Arizona, Texas, and New Hampshire have already enacted legislation to support some form of crypto reserve strategy.

On the federal level, the US government created a strategic Bitcoin reserve last year, following an executive order signed by President Donald Trump in March. This reserve is financed through Bitcoin confiscated during criminal and civil cases, which cannot be sold legally.

Proponents believe that Bitcoin could offer a long-term safeguard against inflation and currency devaluation. However, critics have raised concerns about the associated price volatility and risk management challenges.

Kansas Considers Bitcoin Reserve Fund

Lawmakers in Kansas are also contemplating legislation to establish a state-managed Bitcoin and digital asset reserve, exclusively funded by unclaimed digital property the state currently possesses.

Senate Bill 352, introduced by Senator Craig Bowser, seeks to create a reserve within the state treasury managed by the Kansas state treasurer, avoiding the use of taxpayer dollars or direct purchases of cryptocurrency.

This proposed reserve would comprise abandoned digital assets like unclaimed Bitcoin and other cryptocurrencies, as well as airdrops, staking rewards, and interest under Kansas’ unclaimed property laws. The bill stipulates that 10% of each deposit would go to the state’s general fund, while Bitcoin would remain in the reserve.

Globally, countries such as El Salvador and Bhutan have adopted more straightforward approaches by integrating Bitcoin into national strategies, involving state holdings, mining projects, and development initiatives tied to digital assets.