H 4256 — Strategic Digital Assets Reserve Act

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Ï27, word/_rels/document.xml.rels͗Ínœ0Ç_qè-˜ï]Ґ•ªöC/i=DŠŒ=|4`#ÛdwŸ­‡>R_¡Þ²˜VUõn/H3†ño†ÿæç÷7«M×:/2025) dÃYîžï:À§- «rwPåÕÒ]ÝÞÜC‹•¾CÖM/ý“¹[+Õ_#$ISouth –ïé•’‹+mŠCarolina õ˜<ãLegislature Pèû)Ó®ÓyØö𖈼,9:`êÑŠ/ ”æ—®ó€E*w'NOGt;š»âŽ.]Y#)9WOnline N;0South ‚È&AÕr)±ØŽ÷œXÆDK&•ÕºA*Þ}Ýí7âxÞɋ]dðX-’üM-£Ç`XØd¨Ó©Tvh¾”ЮX™zÀES½]&ÆâÒÚ0˞¿…Mqé¥2)V›Em[˜¶ÊÞ6öOÏß(³X­Carolina º„'ˆW—‘œ¿3aZ%General F™n†‰FAssembly126th áۄPúÙÉÄڛçLÙ¥{46xbÛCköj^]EvþÑ9û¤Y­C­#‰¶aϓ6Ña¥Ž»^¯=I¤ÂSession, j>Hð*þ‚Š¦m%`Aj¯¯ûÕÎ2025-2026Bill 4256Indicates Matter StrickenIndicates New Matter(Text matches printed bills.

Document has been reformatted to meet World Wide Web specifications.)                 A bill   TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "STRATEGIC DIGITAL ASSETS RESERVE ACT OF SOUTH CAROLINA" BY ADDING ARTICLE 5 TO CHAPTER 5, TITLE 11 SO AS TO PROVIDE THAT THE STATE TREASURER MAY INVEST IN CERTAIN DIGITAL ASSETS AND TO PROVIDE THAT THE STATE TREASURER SHALL DEVELOP CERTAIN POLICIES.

  Be it enacted by the General Assembly of the State of South Carolina:

  SECTION 1.  This act may be cited as the "Strategic Digital Assets Reserve Act of South Carolina."   SECTION 2.  The General Assembly of South Carolina finds that:

       (1) Inflation has eroded the purchasing power of assets held in state funds managed by the State Treasurer, as well as state retirement funds.

       (2) Although South Carolina does not have direct control over the national money supply, policies that influence inflation, or the debt issued by the federal government, it is responsible for safeguarding the state's financial resources against the impacts of inflation and other economic uncertainties.

       (3) Bitcoin, as a decentralized digital asset, and other digital assets offer unique properties that can act as a hedge against inflation and economic volatility.

It also helps to diversify the state's funds.

       (4) South Carolina should have access to digital assets such as Bitcoin to protect against inflation and diversify its portfolio.

       (5) The creation of the Digital Assets Reserve will allow the State to own digital assets, including Bitcoin, as a financial asset, and for South Carolinians to voluntarily donate digital assets to promote a shared ownership and community investment in South Carolina's future.

  SECTION 3.  Chapter 5, Title 11 of the S.C.

Code is amended by adding:

  Article 5   Strategic Digital Assets Reserve       Section 11-5-500.  As used in this article:

       (1) "Bitcoin" means the decentralized digital currency launched in 2009, based on Satoshi Nakamoto's white paper, entitled "Bitcoin:

A Peer-to-Peer Electronic Cash System."        (2) "Cold storage" means a method of storing private keys required to transact in digital assets, including Bitcoin, with a nexus to a secure location, protected from unauthorized access and isolated from any network connections.

       (3) "Digital asset" means a virtual currency, cryptocurrency, or natively electronic asset, including Bitcoin, that confers economic, proprietary, or access rights or powers.

Rules will provide for a list of acceptable digital assets that may include, but not be limited to, Bitcoin that may be updated.

       (4) "Exchange-traded product" means a financial instrument that the Securities and Exchange Commission, the Commodities Future Trading Commission, or the State of South Carolina Department of Banking and Securities approves and is traded on a regulated exchange.

       (5) "Private key" means a unique element of cryptographic data used for signing transactions on a blockchain and is known to the owner of the private key.

       (6) "Public address" means a cryptographic identifier used to receive digital assets on a blockchain network.

       (7) "Secure custody solution" means a technological product or blended product and service that meets certain criteria, including having a cryptographic private key that secures a digital asset, which is exclusively known by and accessible by a government entity.

The provider of the secure custody solution shall implement a disaster recovery protocol that ensures customer access to assets in the event the provider becomes unavailable.

The secure custody solution shall undergo regular code audits and penetration testing from audit firms and any identified vulnerabilities are promptly remedied.

       (8) "Qualified custodian" means a federal or state-chartered bank, trust company, or special purpose depository institution or a company regulated by the United States that has custody of the digital assets for an approved exchange-traded product.

      Section 11-5-510.  (A) The State Treasurer may invest in digital assets including, but not limited to, Bitcoin with money that is unexpended, unencumbered, or uncommitted and deposited in any of the following funds:

       (1) the General Fund;

       (2) the Budget Stabilization Reserve Fund;

or        (3) any other investment fund managed directly by the State Treasurer.

    (B) The State Treasurer may invest a portion of unencumbered funds in digital assets, provided the allocation aligns with approved financial management principles, including secure custodial solutions and regular reporting.

    (C) The amount of money that the State Treasurer may invest in digital assets from a fund specified in this section may not exceed ten precent of the total funds under management and adhere to secure storage and risk mitigation and best practices.

Digital assets may not be loaned.

    (D) Any digital assets acquired by any of the funds must be held:

       (1) directly by the State Treasurer through the use of a secure custody solution;

       (2) on behalf of the State by a qualified custodian;

or        (3) in the form of an exchange-traded product issued by a regulated financial institution.

      Section 11-5-520.  (A) The State Treasurer shall develop policies and protocols to ensure the secure storage and protection of digital assets held in the Strategic Digital Assets Reserve, including the use of secure custodial technologies, cold storage, and best practices in digital assets under management.

    (B) The State Treasurer may contract with a qualified, independent, United States-based third-party cryptocurrency entity to assist in the creation, maintenance, operation, or administration of the reserve's security.

      Section 11-5-530.  The State of South Carolina, its agencies, and any contractors or third parties involved in the administration of the Strategic Digital Assets Reserve are strictly prohibited from engaging in, supporting, or coordinating any efforts to disrupt, attack, or undermine the security or operation of the digital asset network.

      Section 11-5-540.  Notwithstanding the investment limits specified in Section 11-5-510, the total amount of each digital asset held by the State in the Strategic Digital Assets Reserve may not exceed three percent of all digital asset within the state's investment portfolio at any given time.