South Dakota’s Legislative Proposal for Bitcoin Integration
Legislators in South Dakota are revisiting the potential for integrating Bitcoin into the management of state public funds. On January 27, Representative Logan Manhart brought forth House Bill 1155, which proposes enabling the state to allocate a portion of its public investment portfolio into Bitcoin. This initiative is a rehash of a similar proposal he presented in 2025 that did not pass the committee stage.
Potential Impact of House Bill 1155
If the bill is enacted, it could signify South Dakota’s alignment with a national trend where various states are considering Bitcoin (BTC) as a viable long-term asset. The legislation would modify existing investment guidelines, permitting the State Investment Council to invest up to 10% of the state’s managed investments, which is estimated to be between $16 billion and $17 billion, potentially resulting in several billion dollars directed towards Bitcoin.
Investment Mechanisms and Custody Requirements
The bill stipulates that the state can engage in Bitcoin investment either via direct purchases or through exchange-traded products (ETPs), with rigorous custody requirements for any direct holdings. Qualified custodians such as federally or state-chartered banks would need to oversee these assets, while ETPs would require approvals from U.S. regulatory bodies including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Legislative Context and Future Considerations
Manhart has characterized Bitcoin as “strong money” for a “strong state,” positing that it could serve as a hedge against inflation and currency devaluation.
Back in January 2025, he introduced a pioneering measure advocating for Bitcoin investments and called for a formal exploration of its potential as an inflation buffer. However, that effort stalled amid apprehensions regarding Bitcoin’s price fluctuations and the ambiguous regulatory landscape.
Despite challenges in the past, with individuals like State Investment Officer Matt Clark voicing their concerns, Manhart expressed confidence in the proposal’s revival. This reintroduction occurs as various states are deliberating the role of digital currencies in public finance, weighing the implications and risks associated with investing taxpayer funds in cryptocurrencies.
Current Status of House Bill 1155
Currently, House Bill 1155 is still in its early legislative phase and has not been scheduled for a vote. Should it pass, South Dakota would join a select number of states that have made inroads into digital asset investment while ensuring strict regulatory oversight and limits. This revived initiative reignites discussions about the risks, benefits, and the future of digital assets within state investment strategies.
