Bitcoin Magazine
Proposed South Carolina Bill Allows State Treasurer to Allocate 10% of State Funds in Bitcoin
Recently, Representative Jordan Pace has reintroduced Bill H. 4256, known as the “Strategic Digital Assets Reserve Act of South Carolina,” to the House of Representatives in South Carolina.
This bill proposes that the State Treasurer be allowed to invest as much as 10% of the state-managed funds into digital assets, such as bitcoin, with the allowance for the Strategic Digital Assets Reserve to hold up to one million bitcoin.
The rationale behind creating such a reserve is based on the statement that “inflation has diminished the purchasing power of assets in state funds.” It acknowledges that “bitcoin, as a decentralized digital asset, along with other digital assets, possess unique characteristics that can serve as a safeguard against inflation and economic fluctuations.”
While the bill doesn’t specify if state officials are required to possess the private keys for the accumulated bitcoin and other digital assets, it does authorize the State Treasurer to establish guidelines and procedures to secure these assets. This could include the option of cold storage or hiring a third-party service for asset custody. Additionally, the State Treasurer can engage a third-party entity to assist in the development, upkeep, and administration of security protocols for the reserve.
The bill further mandates that the State Treasurer compile a biennial report detailing the total digital assets held in the reserve, their corresponding value in U.S. dollars, and a summary of all transactions and expenditures involving the reserve since the last report. Furthermore, the State Treasurer is required to make available proof of reserves by providing the public addresses of the digital assets on a state-managed official website, allowing for public auditing and verification of the reserve’s assets.
In conclusion, the proposed bill ensures that the Strategic Digital Asset Reserve is subject to audits. These audits will examine the security of custody measures, ensure compliance with local, state, and federal regulations, and evaluate internal controls needed to prevent cyber threats and mismanagement.
As specified in the bill, these independent audits are to be conducted annually and submitted to the appropriate oversight committee. Moreover, any recommendations from the independent audits must be addressed within 90 days of the report’s release, with a follow-up report to the oversight committee detailing corrective actions taken.
This article Proposed South Carolina Bill Allows State Treasurer to Allocate 10% of State Funds in Bitcoin first appeared on Bitcoin Magazine and was authored by Frank Corva.
