South Dakota Moves Toward Bitcoin Reserves Amid Growing State Interest

South Dakota introduced a bill to invest up to 10% of state funds in Bitcoin, joining other U.S. states exploring BTC reserves.

South Dakota is moving closer to holding Bitcoin as part of its state-managed assets. A newly introduced bill proposes direct exposure to BTC using public funds.

The move places South Dakota among a growing number of U.S. states exploring Bitcoin reserves.

South Dakota Proposes Direct Bitcoin Investment

South Dakota lawmaker Logan Manhart has introduced a bill that allows state funds to be invested in Bitcoin.

The proposal would authorize the South Dakota State Investment Council to include BTC in its portfolio.

Other assets already include bonds, government securities, and exchange-traded products.

🔥 BULLISH:

🇺🇸 US State of South Dakota introduces a bill to allow state investment in Bitcoin.

More adoption is happening. pic.twitter.com/mCnnm9ztQw

— Max Crypto (@MaxCrypto) January 27, 2026

The bill sets a limit on exposure to Bitcoin. Up to 10 percent of available state funds could be allocated to BTC. This cap is designed to manage risk while allowing participation in digital assets.

Manhart commented on the proposal after filing the bill. He 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.” The bill is now scheduled for committee review.

Custody Rules and Security Measures Outlined

The proposal places strong focus on custody and asset protection. The State Investment Council may hold Bitcoin directly or use a qualified custodian.

It may also gain exposure through regulated exchange-traded products.

If the state holds Bitcoin directly, it must control the private keys. The bill requires hardware encryption and secure key storage.

Storage systems must be kept in at least two geographically separate data centers.

Additional safeguards are included in the proposal. Transactions would require multi-party approvals.

Disaster recovery plans must also be in place. Regular audits and penetration testing are required to reduce operational risk.

State-Level Bitcoin Interest Continues to Expand

South Dakota’s proposal follows similar actions in other states. Kansas recently introduced a bill to create a state-managed Bitcoin reserve.

The plan would fund the reserve using unclaimed digital assets.

Arizona has already taken related steps. The state established a Bitcoin reserve fund last year. It chose to hold unclaimed crypto assets for up to three years instead of selling them.

Texas has also disclosed Bitcoin exposure. The state purchased up to $5 million worth of BTC in December. These moves reflect growing state-level interest in Bitcoin as a reserve asset.

**_Related Reading: _**Oklahoma Joins Growing Movement to Adopt Bitcoin Reserves

Federal Context and Legislative Path Forward

The bill arrives as the U.S. government continues discussions around a national Bitcoin reserve.

Patrick Witt, a crypto adviser to former President Donald Trump, recently confirmed the topic remains a priority. Federal discussions have increased attention on state-level initiatives.

House Bill 1155 must pass committee review before advancing. Lawmakers will assess risk controls, custody methods, and compliance standards.

Further amendments may follow during legislative debate.

JUST IN: South Dakota Lawmaker Reintroduces Bitcoin Reserve Bill

HB 1155 would let the state invest up to 10% of public funds into $BTC – Potentially $1.6B+

Rep. Manhart’s 2025 Bill Died 9-3. He promised to return and delivered.

Only TX, AZ & NH Have Passed BTC Reserve Laws so… pic.twitter.com/tAP8OYnlKo

— Crypto Patel (@CryptoPatel) January 28, 2026

If approved, South Dakota would formally join states exploring Bitcoin reserves. The proposal shows continued experimentation with digital assets at the government level. Market participants are closely watching how state legislatures proceed.