Key Takeaways
- South Carolina may invest up to 10% of state funds in Bitcoin.
- The Strategic Digital Assets Reserve Act sets a 1 million BTC holding limit.
- The state dropped its lawsuit against Coinbase over staking services.
On March 27, South Carolina lawmakers introduced the Strategic Digital Assets Reserve Act (H4256), a bill that could authorize the state to allocate up to 10% of its funds into Bitcoin.
Legislative support
Representative Jordan Pace, who sponsored the legislation, described Bitcoin as a hedge against inflation and economic uncertainty.
The bill includes a strict cap—South Carolina cannot hold more than 1 million BTC.
Funding for the purchases would come from existing pools like the General Fund and Budget Stabilization Reserve Fund.
Transparency measures
To enhance transparency, the bill mandates public disclosure of wallet addresses linked to the state’s Bitcoin holdings.
Citizens would be able to verify transactions and balances on-chain.
The proposal also permits voluntary Bitcoin donations from residents and imposes rigorous custody standards, including the use of cold storage or certified custodians.
Coinbase staking lawsuit dropped
In a separate but related move, South Carolina has dropped its lawsuit against Coinbase.
The case, initially filed in June 2023, accused the exchange of offering unregistered securities via its staking services.
Settlement and implications
The dismissal follows a settlement between Coinbase and the state’s securities division.
Coinbase’s Chief Legal Officer, Paul Grewal, noted that South Carolina residents missed out on nearly $2 million in staking rewards during the litigation.
Future outlook
Grewal expressed hope that other states—like California, New Jersey, and Illinois—would follow South Carolina’s lead.
Vermont had already dismissed its similar case earlier in March.
