South Dakota Lawmaker Proposes Bill to Allow State Investment in Bitcoin

South Dakota has joined the growing list of U.S. states exploring Bitcoin adoption at the government level, as Representative Logan Manhart introduced a new bill that would allow the South Dakota State Investment Council to invest in Bitcoin. If passed, the legislation would place Bitcoin alongside traditional assets such as government securities, bonds, and exchange-traded funds within the state’s investment portfolio, signaling a major shift in how public funds could be managed.

Under the proposal, the State Investment Council would be permitted to allocate up to 10% of its available funds into Bitcoin, setting a clear cap to manage risk exposure. Manhart emphasized the symbolic and financial significance of the move, stating that Bitcoin represents “strong money” that aligns with the vision of building a “strong state.” The bill arrives at a time when digital assets are gaining broader acceptance among institutional and governmental investors across the United States.

The introduction of House Bill 1155 also coincides with renewed national attention on Bitcoin, particularly as the U.S. government advances discussions around a Strategic Bitcoin Reserve. Trump’s crypto adviser, Patrick Witt, recently confirmed that establishing such a reserve remains a priority for the current administration, further reinforcing Bitcoin’s growing role in public finance conversations.

A major focus of the South Dakota proposal is security and custody. The bill outlines strict requirements for safeguarding digital assets, allowing Bitcoin holdings to be managed through secure direct custody, qualified custodians, or regulated exchange-traded products. If the state holds Bitcoin directly, the Investment Council must maintain exclusive control over private keys, employ hardware encryption, and store key-related hardware across at least two geographically diverse and secure data centers. Additional measures include multi-party transaction approvals, disaster recovery planning, regular penetration testing, and mandatory audits.

If approved, South Dakota could follow states like Texas, which disclosed a Bitcoin purchase of up to $5 million in late 2024. Other states are moving in similar directions, with Kansas and Arizona proposing or implementing Bitcoin reserve strategies using unclaimed digital assets rather than liquidating them. As more states consider Bitcoin investment, South Dakota’s bill highlights a broader trend toward integrating cryptocurrency into public-sector financial strategies.