Legislation in South Carolina suggests establishing Bitcoin reserve, limited to 1 million units

A recently presented bill in South Carolina suggests establishing a state-operated Bitcoin reserve, with a limit of up to 1 million BTC.

Submitted on March 27, South Carolina's Strategic Digital Assets Reserve Act aims to authorize the state treasurer to possess Bitcoin (BTC) and other digital assets as a shield against inflation. According to the bill, inflation has diminished the buying power of retirement funds and state-controlled assets. Consequently, South Carolina aims to spread its finances by investing in Bitcoin, which is seen as a potential safeguard against economic instability. The proposed Digital Assets Reserve would empower the state to own and administer Bitcoin while also permitting South Carolinians to donate digital assets voluntarily.

The bill outlines specific investment guidelines, necessitating secure storage through cold wallets or approved custodians and restricting holdings of digital assets to 10% of the total funds under management. Moreover, the state is only authorized to possess a maximum of 1 million BTC.

If the bill is passed, South Carolina's state treasurer would be permitted to invest unused or unallocated funds from sources such as the General Fund and Budget Stabilization Reserve Fund into the reserve. The state treasurer would be obligated to publish public addresses of the reserve's holdings to ensure transparency and allow citizens to verify transactions.

This proposal arises as South Carolina endeavors to revoke its position on cryptocurrency regulation. In a March 27 post on X, Coinbase's chief legal officer Paul Grewal disclosed that the state has abandoned its lawsuit against Coinbase's staking services, clearing the way for the exchange to resume staking for residents.

"The dominoes keep falling. South Carolina has just joined Vermont in dropping its baseless staking lawsuit against @Coinbase. Staking will very soon be back for Coinbase users in South Carolina. This is not just a victory for us, but for American consumers and we hope it's a sign of..."

Grewal pointed out that South Carolina users lost nearly $2 million in staking rewards due to the legal dispute and commended the dismissal of the lawsuit as a triumph for consumer rights. He emphasized that 52 million Americans own cryptocurrency and require clear rules and consumer protections. Grewal praised South Carolina for its decision and expressed hope that other states with staking bans will follow suit.