South Carolina is making headlines with its innovative approach to incorporating digital assets into state financial planning. In a bold move, state lawmakers recently introduced a bill that aims to establish a Bitcoin reserve to protect public funds from inflation.
The bill, known as the Strategic Digital Assets Reserve Act (H4256), was introduced by Representative Jordan Pace. If passed, the legislation would allow the State Treasurer to allocate up to 10% of state-held funds to Bitcoin, with a maximum limit of 1 million BTC. The funds for these investments would be sourced from existing funds such as the General Fund and the Budget Stabilization Reserve Fund.
One of the key features of the bill is the emphasis on transparency. The legislation mandates the public disclosure of wallet addresses linked to the Bitcoin reserve, enabling citizens to track transactions and verify holdings on the blockchain. Additionally, the bill includes provisions for residents to make voluntary Bitcoin contributions, with strict storage requirements to safeguard the assets.
In a related development, South Carolina has decided to drop its lawsuit against Coinbase over alleged securities violations related to its staking services. The case, which was filed in June 2023, has been dismissed following an agreement between the state’s securities division and Coinbase.
Coinbase’s Chief Legal Officer, Paul Grewal, welcomed the resolution of the case, highlighting that South Carolina residents had missed out on nearly $2 million in staking rewards during the legal dispute. Grewal expressed optimism that other states, including California, New Jersey, and Illinois, would follow South Carolina’s lead in resolving similar issues.
This decision to dismiss the lawsuit mirrors a recent move by Vermont, which also dropped its legal challenge against Coinbase earlier in March. The developments in South Carolina come on the heels of the US Securities and Exchange Commission (SEC) concluding its case against Coinbase in February.
Overall, South Carolina’s proactive stance on digital assets signals a growing acceptance of cryptocurrencies in mainstream financial circles. By exploring the potential benefits of Bitcoin reserves and resolving legal disputes with industry players like Coinbase, the state is paving the way for a more inclusive and forward-thinking approach to financial management.