South Dakota Lawmaker Revives Bill to Allow State Bitcoin Investment - Crypto’s Next Frontier?

Forget gold reserves—South Dakota's eyeing a digital vault.

Legislative Gambit

A state lawmaker just dusted off a proposal that could let South Dakota's treasury dive into Bitcoin. It's a move that bypasses traditional asset playbooks and cuts straight to the crypto debate raging in statehouses nationwide. Not the first state to flirt with the idea, but in the heartland? That gets attention.

The Sovereign Portfolio Play

Why would a state want Bitcoin on its balance sheet? Proponents see it as a hedge—a non-correlated asset that could diversify public funds away from stocks and bonds. Critics see volatility risk that could make taxpayer dollars vanish faster than a meme coin pump. It's the ultimate test of crypto's 'store of value' thesis, with public money on the line.

Regulatory Hurdles Ahead

Even if the bill passes, the real work begins. Custody, security, accounting standards—states aren't exactly set up for digital asset management. It’s one thing for a crypto fund to get rekt; it’s another when it’s a pension fund. The due diligence required would make a Wall Street compliance officer sweat.

Finance's predictable response? A chorus of 'prudent risk management' warnings—the same folks who missed the internet, then blockchain, and will likely miss the next thing, too.

If South Dakota pulls this off, it won't just be investing in Bitcoin. It'll be betting that digital assets belong in the bedrock of public finance—a provocative wager that could redefine what a state treasury even looks like.

South Dakota Bitcoin Bill Sets Strict Custody and Security Rules

“I am proud to say I have released my bill that would allow the State of South Dakota to invest in Bitcoin,” Manhart wrote in a post on X. “Strong money. Strong state.”

The proposal outlines detailed custody and security requirements for any state-held Bitcoin.

These include exclusive control of private keys, encrypted hardware storage, geographically distributed secure facilities, multi-party governance controls and regular security audits.

House Bill 1155 has received its first reading and has been referred to the Committee on Commerce and Energy, according to the official legislative journal.

The measure closely resembles House Bill 1202, which Manhart introduced during the 2025 legislative session.

I am proud to say I have released my bill that would allow the State of South Dakota to invest in Bitcoin.

Strong money. Strong state.

That earlier effort sought to add bitcoin to the list of permissible state investments but failed to advance after being deferred beyond South Dakota’s 40-day legislative session limit.

The renewed push comes as interest in Bitcoin-backed reserves grows among US states.

Lawmakers in Kansas and Florida have advanced similar proposals, while Arizona, Texas and New Hampshire have already passed legislation allowing some FORM of crypto reserve strategy.

At the federal level, the US government established a strategic Bitcoin reserve last year following a March executive order signed by President Donald Trump.

The reserve is funded using Bitcoin seized in criminal and civil cases, assets that are legally barred from being sold.

Supporters argue that Bitcoin could serve as a long-term hedge against inflation and currency debasement, while critics have raised concerns about price volatility and risk management.

Kansas Weighs Bitcoin Reserve Fund

As reported, lawmakers in Kansas are considering legislation that would create a state-managed Bitcoin and digital assets reserve funded entirely by unclaimed digital property already held by the state.

Senate Bill 352, introduced by Senator Craig Bowser, proposes establishing a reserve within the state treasury overseen by the Kansas state treasurer, without using taxpayer funds or direct cryptocurrency purchases.

Under the proposal, the reserve would be built from abandoned digital assets such as unclaimed Bitcoin, other cryptocurrencies, airdrops, staking rewards and interest that fall under Kansas’ unclaimed property laws.

The bill specifies that 10% of each deposit would be transferred to the state’s general fund, while Bitcoin would remain locked within the reserve.

Internationally, countries such as El Salvador and Bhutan have already taken more direct approaches, incorporating Bitcoin into national strategies through state holdings, mining initiatives, and development projects tied to digital assets.