A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "STRATEGIC DIGITAL ASSETS RESERVE ACT OF SOUTH CAROLINA" BY ADDING ARTICLE 5 TO CHAPTER 5, TITLE 11 SO AS TO PROVIDE THAT THE STATE TREASURER MAY INVEST IN CERTAIN DIGITAL ASSETS AND TO PROVIDE THAT THE STATE TREASURER SHALL DEVELOP CERTAIN POLICIES.
H4256 creates the “Strategic Digital Assets Reserve Act of South Carolina” and authorizes the State Treasurer to invest certain state funds in digital assets, including Bitcoin, subject to specified limits and safeguards. The bill applies to unexpended, unencumbered, or uncommitted money in the General Fund, the Budget Stabilization Reserve Fund, and other investment funds managed by the Treasurer. It defines key terms such as digital asset, cold storage, private key, qualified custodian, and exchange-traded product, and it directs the Treasurer to establish policies for custody, security, reporting, and donation procedures.
The bill caps digital asset investments at 10% of the total funds under management from the covered funds, and it also states that the total amount of each digital asset held in the reserve may not exceed 3% of the state’s investment portfolio at any given time. Digital assets may be held directly by the Treasurer, through a qualified custodian, or through a regulated exchange-traded product, and they may not be loaned. The reserve may also accept gifts, grants, donations, bequests, or devises of digital assets from South Carolina residents, and the Treasurer must publish public wallet addresses while keeping private keys confidential. The act is temporary and expires on September 1, 2035.
If enacted, the bill would amend Title 11 of the South Carolina Code by adding a new article governing a state digital asset reserve and expanding the Treasurer’s investment authority to include cryptocurrency and related digital assets. It would impose new operational, reporting, audit, and custody requirements on the Treasurer’s office, require annual independent testing and biennial reporting, and authorize rulemaking to administer the program. It also creates a new framework for state acceptance and management of donated digital assets and sets a sunset date for the program.
Based on the bill text, the measure is framed positively as a financial diversification and inflation-hedging strategy, with an emphasis on security, transparency, and public accountability. No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available context. The overall tone of the bill itself is strongly supportive of digital assets and state participation in the crypto market.
The main points of contention likely concern whether the state should hold volatile digital assets at all, the prudence of exposing public funds to cryptocurrency risk, and whether the proposed limits and safeguards are sufficient. Potential critics may question the 10% investment cap, the reliance on Bitcoin and other digital assets as an inflation hedge, and the operational complexity of custody, cybersecurity, and auditing. Supporters are likely to emphasize diversification, transparency through public wallet addresses, and the ability to accept voluntary donations from residents.