South Dakota lawmakers are once again weighing whether Bitcoin should play a role in managing public funds.
Summary
- A new bill would allow South Dakota to invest up to 10% of public funds in Bitcoin
- The proposal closely mirrors a failed 2025 attempt but adds clearer custody rules
- The move reflects growing interest among U.S. states in Bitcoin as a reserve asset
On Jan. 27, State Representative Logan Manhart reintroduced a bill that would allow South Dakota to invest a portion of its state-managed funds in Bitcoin.
The proposal, filed as House Bill 1155, closely mirrors a similar measure Manhart introduced in 2025 that failed to advance out of committee.
If approved, the bill would mark another step in a growing trend among U.S. states exploring Bitcoin (BTC) as a long-term store of value.
Bitcoin allocation capped at 10%
HB 1155 would amend South Dakota’s investment code to permit the State Investment Council to allocate up to 10% of public funds into Bitcoin. Based on previous estimates placing the state’s investment pool between $16 billion and $17 billion, the measure could open the door to multi-billion-dollar exposure if fully used.
The bill allows for Bitcoin exposure through direct holdings or regulated exchange-traded products. Any direct holdings would need to meet strict custody standards, including the use of qualified custodians such as federally or state-chartered banks or trust companies.
Exchange-traded products would need approval from U.S. regulators, including the SEC, the CFTC, or South Dakota’s Division of Banking.
Manhart has referred to Bitcoin as “strong money” suited for a “strong state,” presenting the proposal as a way to address inflation and long-term currency risks.
A revived proposal with familiar hurdles
In January 2025, he introduced the state’s first Bitcoin investment bill, along with a resolution calling for a formal review of Bitcoin as a hedge against inflation. That initiative did not advance, as lawmakers expressed concerns about price volatility, valuation challenges, and regulatory uncertainty.
State Investment Officer Matt Clark was among those who expressed reservations at the time. Despite the setback, Manhart said he planned to bring the proposal back in a future session.
The proposal comes as several U.S. states consider whether digital assets should be used in public finance. Lawmakers across the country are weighing the potential benefits and risks of Bitcoin in government-managed funds.
The bill has not yet reached a vote and is still at an early stage of the legislative process. If it passes, South Dakota would be among the few states that have taken steps to hold or invest in Bitcoin, usually under clear limits and regulatory oversight.
At this stage, HB 1155 revives debate over risk exposure, diversification, and how digital assets might fit into state investment policies.
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