South Dakota State lawmaker Rep. Logan Manhart has reintroduced the Bitcoin reserve bill, HB 1155, to permit the state to invest state funds in Bitcoin.
The proposed bill was introduced on January 27, 2026, and aims to allocate up to 10% of state revenues to invest in Bitcoin via a safe and regulated custody system.
The updated proposal presents new security measures to make sure that the Bitcoin holdings are stored and managed safely as per the best practices in the security of digital assets.
HB 1155: important provisions and custody requirements
The amended HB 1155 presents rigid prerequisites for Bitcoin deposits by the South Dakota State Investment Council.
According to the bill, Bitcoin has to be held in an insecure custodial system, whether it is held by managers of the Council itself or by a qualified custodian.
Besides, the hardware encryption of the private keys should be used by the custody system, as such keys have to be stored in an encrypted environment and can only be viewed through passwordless authentication.
In the bill, the private keys shall be stored in 2 geographically separate data centres in order to provide greater security.
According to the new structure, any transaction and user activity involving Bitcoin ownership will have to be monitored and documented.
Multi-party governance will be used to authorize transactions so as to make sure that any actions are safely carried out.
The bill also requests regular security audits, penetration testing, and a disaster recovery plan to reduce the threats related to storing digital assets.
Barriers to Bitcoin reserve efforts by the federal and state governments
As the bill in South Dakota proceeds, federal plans for a U.S. Bitcoin reserve face legal obstacles.
The attempts to develop a Strategic Bitcoin Reserve under the Biden administration have been postponed because of complicated legal provisions.
These clauses make it difficult to have the direct purchase of Bitcoin by the White House into its national reserves.
Also, at the state-level, some proposals like the West Virginia-based inflation protection act aim to enable state treasuries to invest in digital currencies like Bitcoin.
Nevertheless, such investments must be made after the federal government gives regulatory approval. Out of around 50 other states, including Texas, Arizona, and New Hampshire, have already enacted laws permitting Bitcoin or crypto reserves, but legislation to this effect is awaiting passage in many other states.
Bitcoin Reserves activities are gaining traction
The Bitcoin reserve bill in South Dakota is an important step towards the adoption of digital assets in the investment strategies at the state level.
In case the bill is approved, the state will be among the few states in the U.S. to have Bitcoin in its reserves officially.
Nevertheless, federal laws to develop a national Bitcoin reserve are an intricate and lengthy process, although state efforts are becoming more popular.
The post South Dakota Lawmaker Revives Bitcoin Reserve Bill Proposal first appeared on Coinfea.