A South Dakota lawmaker has revived legislation that would allow the state to invest a portion of its public funds in Bitcoin, reopening a debate that stalled during last year’s legislative session. The proposal signals renewed interest among US states in using digital assets as part of long-term reserve and investment strategies.
Republican Representative Logan Manhart reintroduced the measure as House Bill 1155, which would amend South Dakota’s public investment statutes to permit the State Investment Council to allocate up to 10% of eligible funds to Bitcoin. The bill received its first reading this week and has been referred to the Committee on Commerce and Energy for further consideration.
Investment Scope and Custody Framework
Under the proposal, the state would be allowed to gain Bitcoin exposure through multiple channels, including direct holdings, qualified custodians, or regulated exchange-traded products. The flexibility is intended to allow the Investment Council to choose structures that align with existing risk management practices while maintaining regulatory oversight.
The bill places heavy emphasis on custody and security, addressing one of the primary institutional concerns around digital asset ownership. Requirements include exclusive state control of private keys, encrypted hardware storage, geographically distributed secure facilities, multi-party governance controls, and regular independent security audits. These provisions mirror safeguards increasingly used by institutional crypto custodians and financial firms.
Manhart framed the proposal as a step toward strengthening the state’s financial resilience, arguing that Bitcoin could serve as a hedge against inflation and long-term currency debasement. Critics, however, continue to highlight Bitcoin’s price volatility and the challenges of integrating a highly liquid, global asset into conservative public investment frameworks.
Part of a Broader State-Level Trend
South Dakota’s renewed effort comes as more US states explore Bitcoin-backed reserve strategies, reflecting a shift in institutional attitudes toward digital assets. Lawmakers in Kansas and Florida have recently advanced similar proposals, while Arizona, Texas, and New Hampshire have already passed legislation allowing limited forms of crypto reserves or digital asset exposure.
At the federal level, the US government established a strategic Bitcoin reserve last year, funded with Bitcoin seized in criminal and civil proceedings and legally restricted from sale. That move has added political legitimacy to state-level discussions, even as regulators continue to debate the role of digital assets in public finance.
Kansas, for example, is weighing a bill that would create a state-managed Bitcoin and digital asset reserve using unclaimed digital property already held by the state. The proposal avoids direct purchases with taxpayer funds, instead relying on abandoned crypto assets, staking rewards, and airdrops that fall under existing unclaimed property laws.
Institutional and Competitive Context
Globally, governments are experimenting with more direct Bitcoin strategies. El Salvador and Bhutan have incorporated Bitcoin into national financial plans through state holdings, mining operations, and development projects linked to digital assets. While US states remain far more cautious, the growing number of proposals suggests Bitcoin is increasingly viewed as a strategic asset rather than a speculative experiment.
Whether House Bill 1155 advances beyond committee remains uncertain, but its reintroduction underscores how digital assets are becoming a recurring topic in public finance discussions. As states compete to position themselves at the forefront of financial innovation, Bitcoin investment frameworks are moving steadily closer to the institutional mainstream.
