South Dakota Proposes Bill Allowing State to Invest in Bitcoin

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South Dakota Republican Rep. Logan Manhart has introduced House Bill 1155, a proposal that would permit the state to invest public funds in Bitcoin.

The legislation, formally filed in the 101st Legislative Session, allows the State Investment Council to allocate up to 10% of state funds available for investment to BTC, marking a potential first for the state in adopting crypto as part of its investment strategy.

The bill outlines multiple options for holding BTC safely. State funds could be held directly by the Investment Council through a secure custody solution, entrusted to a qualified custodian, or acquired in the form of exchange-traded products (ETPs) issued by registered investment companies.

Security is a central focus of the proposal. Any BTC held by the state would require a private key exclusively controlled by the Investment Council, stored in encrypted, hardware-secured environments across at least two geographically separated, secure locations.

Transaction approvals would require multi-party governance, and systems would enforce user access controls and maintain detailed audit logs.

Additionally, the bill mandates regular code audits, penetration testing, and disaster recovery protocols to ensure state assets remain secure and accessible even in the event of system failures.

In announcing the bill on X, Manhart said, “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.”

U.S. states are starting to love bitcoin

The proposal comes amid growing interest from U.S. states and municipalities in incorporating digital assets into public portfolios, reflecting broader trends in cryptocurrency adoption and financial innovation.

Earlier this month, Rhode Island lawmakers introduced Senate Bill S2021 to temporarily exempt small Bitcoin transactions from state income and capital gains taxes, with a $5,000 monthly and $20,000 annual cap.

The bill treats Bitcoin as a “digital, decentralized currency” and allows residents and Rhode Island–based businesses to self-certify eligibility while keeping simple records.

The exemption would take effect January 1, 2027, and expire January 1, 2028, as a pilot program to reduce tax friction on everyday Bitcoin use.

New Hampshire is another state actively championing Bitcoin. In May 2025, New Hampshire became the first U.S. state to allow its treasury to invest in Bitcoin and other large-cap digital assets, authorizing up to 5% of certain public funds to be allocated into crypto under House Bill 302. BTC currently qualifies under the market-cap rule.