TLDR:
- House Bill 1155 proposes adding Bitcoin as an authorized investment for select South Dakota public funds
- The bill caps Bitcoin allocations at ten percent of state moneys made available for investment
- Strict custody standards require regulated custodians or secure state-controlled storage solutions
- The proposal defines Bitcoin narrowly to the original proof-of-work network starting in 2009
South Dakota moves toward Bitcoin reserves amid growing state interest following the introduction of House Bill 1155 in the state legislature.
Sponsored by Representative Manhart, the proposal seeks to authorize Bitcoin as an eligible investment for certain public funds. The bill modifies existing statutes without altering constitutional protections for restricted trusts.
Its language emphasizes regulatory structure, allocation limits, and custody controls, reflecting a measured approach to integrating digital assets into state-level financial management.
Lawmakers Outline a Defined Path for Bitcoin Allocation
The proposed legislation amends § 4-5-26 to include Bitcoin among approved investment classes. This change places Bitcoin alongside U.S. government obligations, municipal debt, and regulated investment funds.
Protected trust funds and constitutionally restricted accounts remain excluded. The authorization applies only to state moneys made available for investment.
To avoid interpretive uncertainty, the bill introduces specific statutory definitions. Bitcoin is described as the digital asset originating from the January 3, 2009 genesis block.
It must maintain continuity through the longest proof-of-work chain recognized by network nodes. This definition narrows eligibility to the original network.
Other supporting definitions establish operational clarity. Digital assets are broadly described but not authorized for investment.
Exchange-traded products must be approved by federal or state regulators and traded on U.S. regulated exchanges. Qualified custodians are limited to regulated banking or trust entities.
The measure also establishes a quantitative boundary. Bitcoin investments may not exceed ten percent of state moneys available for investment.
This limitation applies across all permitted holding methods. Oversight authority remains with the State Investment Council under existing governance structures.
Custody and Security Standards Shape Implementation
House Bill 1155 specifies three permissible methods for holding Bitcoin. The State Investment Council may hold assets directly using an approved secure custody solution.
Assets may also be held by a qualified custodian regulated by banking authorities. Exchange-traded products issued by registered investment companies are included as an option.
For direct custody, the bill sets detailed technical requirements. Private keys must remain exclusively controlled by the State Investment Council.
Keys must be stored within encrypted, hardware-secured environments. Transactions must be signed through protected communication channels using end-to-end encryption.
Governance and physical safeguards are also addressed. Any hardware containing private keys must be maintained in at least two geographically diverse secure data centers.
Transaction authorization must follow a multi-party governance structure. User access controls and comprehensive logging of all actions are required.
Operational continuity is addressed through mandated recovery planning. Custody providers must maintain disaster recovery protocols ensuring asset access if services become unavailable.
Regular code audits and penetration testing are required. Public updates shared on social platforms have referenced these provisions as core elements of the bill’s framework, focusing attention on process rather than market conditions.