South Carolina Seeks to Establish 1 Million BTC Cap for State Bitcoin Reserve, Paving The Way for Innovative Financial Management

The primary objective of this bill is to provide a hedge against inflation. According to the bill , inflation has diminished the purchasing power of both retirement funds and assets managed by the state. 

To mitigate this, South Carolina intends to diversify its finances, viewing Bitcoin as a potential safeguard against economic instability.

The proposed Digital Assets Reserve would enable South Carolina to own and manage Bitcoin. Furthermore, the bill would allow South Carolinians to donate digital assets to the reserve voluntarily.

The bill outlines specific investment parameters, including the requirement for safe storage using cold wallets or certified custodians. It also sets a limit on digital asset holdings at 10% of the total funds under management.

Additionally, the state is restricted from holding more than 1 million BTC.

If the bill is passed, the state treasurer would be authorised to invest unused or uncommitted funds from sources such as the General Fund and the Budget Stabilization Reserve Fund into this reserve. 

To ensure transparency, the state treasurer would be required to publish the public addresses of the reserve’s holdings, allowing citizens to verify transactions.

This proposal comes at a time when South Carolina appears to be changing its stance on cryptocurrency regulation. 

Notably, on March 27, 2025, Coinbase’s chief legal officer, Paul Grewal, announced on X that South Carolina had dropped its lawsuit against Coinbase’s staking services. This development is expected to pave the way for Coinbase to relaunch staking for residents of South Carolina. Grewal noted that South Carolina users had lost nearly $2 million in staking rewards due to the legal battle and hailed the dismissal as a victory for consumer rights. 

He expressed hope that other states with staking bans would follow South Carolina’s lead.

It’s worth noting that another state, Arizona, is also reportedly taking a leading role in the push for Bitcoin reserves, with two bills having cleared a House Committee.

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