South Dakota is on the verge of making history as the first U.S. state to potentially establish a strategic Bitcoin reserve (SBR), according to State Representative Logan Manhart. On February 4, Manhart announced that due to South Dakota’s short legislative session—concluding in mid-March—the state could be the first to pass such groundbreaking legislation.
“South Dakota has one of the shortest legislative sessions in the country. It is likely South Dakota will be the first state in the nation to pass a Bitcoin reserve bill,” Manhart posted on X.
This declaration comes amid growing momentum across multiple states racing to position themselves at the forefront of public-sector Bitcoin adoption. While several states have introduced similar proposals, South Dakota and Utah are now leading the charge, each navigating tight legislative timelines.
The Push for a State-Level Bitcoin Reserve
The initiative in South Dakota began gaining traction when Manhart revealed on January 28 that he would introduce legislation to create a strategic Bitcoin reserve. His statement emphasized proactive governance:
“I am proud to say I will be bringing a bill in the South Dakota House that would create a strategic bitcoin reserve. Now is one of the few chances government has at being proactive. Let’s have this conversation!”
That vision materialized as House Bill 1202, introduced on January 30. The bill is co-sponsored by Representatives Aaron Aylward, Phil Jensen, Dylan C. Jordan, and Senator Carl Perry. If passed, it would authorize the State Investment Council to allocate up to 10% of state funds into Bitcoin—a bold financial move signaling long-term confidence in digital assets.
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Key Provisions of HB 1202
The bill outlines strict protocols for custody and security of any acquired Bitcoin:
- Custody Options: BTC holdings can be managed through a secure state-run custody solution, a qualified third-party custodian, or via an exchange-traded product (ETP) approved by federal regulators.
- Private Key Security: Requires multi-party governance for access control, encrypted storage solutions, and comprehensive disaster recovery planning.
- Transparency & Oversight: Ensures accountability through regular audits and public reporting mechanisms.
After its first reading in the House on February 3, the bill was referred to the House State Affairs Committee for further review—a critical step toward potential passage.
A National Race Toward Bitcoin Reserves
South Dakota isn’t alone in this endeavor. As of early 2025, 14 U.S. states have introduced legislation aimed at creating strategic Bitcoin reserves. Among them, Utah stands out as a strong contender.
Utah’s SBR bill, introduced by Representative Jordan Teuscher on January 20, operates under an even tighter deadline—just 45 days to pass or fail during its legislative session. Dennis Porter, CEO of the Satoshi Action Fund, believes this compressed timeline gives Utah a unique advantage:
“It’s either sink or swim in 45 days; no other state has a faster calendar, and no one else has the political momentum and willpower to get it done.”
Despite Utah’s aggressive schedule, South Dakota’s early filing and procedural progress place it in a favorable position. With only about 40 legislative days total, every step counts.
Federal Interest in a National Bitcoin Reserve
While state-level action accelerates, discussions about Bitcoin at the federal level are also emerging. On February 4, during a rare joint press conference involving White House, Senate, and House leadership focused on digital assets, David Sacks—known as Trump’s Crypto Czar—confirmed that the federal government is evaluating the possibility of a national Bitcoin reserve.
“We’re evaluating a Bitcoin reserve. One of the first things we’re going to look at in the admin. Concept of Sovereign Wealth Fund is separate,” Sacks stated.
Though still in exploratory stages, this acknowledgment marks a significant shift in how policymakers view Bitcoin—not just as a speculative asset but as a potential component of national financial strategy.
Why This Matters: Bitcoin as Institutional Asset
The movement toward state-held Bitcoin reserves reflects broader recognition of cryptocurrency’s role in modern finance. Proponents argue that allocating a portion of public funds into Bitcoin offers:
- Long-term value preservation, especially amid inflation concerns.
- Portfolio diversification for state treasuries.
- Technological leadership, attracting blockchain businesses and talent.
Moreover, holding Bitcoin on balance sheets could insulate state economies from traditional market volatility while positioning them ahead of future digital asset adoption curves.
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Frequently Asked Questions (FAQ)
Q: What is a Strategic Bitcoin Reserve (SBR)?
A: An SBR allows a government entity to legally purchase and hold Bitcoin as part of its financial reserves, similar to gold or foreign currencies.
Q: Can states actually own Bitcoin?
A: Currently, no U.S. state holds Bitcoin on its balance sheet. However, bills like South Dakota’s HB 1202 aim to change that by establishing legal frameworks for acquisition and custody.
Q: Is there a risk in states investing in Bitcoin?
A: Like any investment, Bitcoin carries price volatility risks. However, proponents believe long-term appreciation potential outweighs short-term fluctuations, especially with capped supply and increasing institutional adoption.
Q: How much Bitcoin could South Dakota buy?
A: Under HB 1202, up to 10% of eligible state funds could be allocated—exact dollar amounts depend on final appropriations and market conditions.
Q: What happens if the bill doesn’t pass?
A: The proposal would die with the legislative session unless reintroduced next year. However, growing momentum across states suggests similar efforts will continue regardless.
Q: Could other states follow suit?
A: Absolutely. States like Tennessee, Oklahoma, and Arizona have already explored similar legislation. A successful SBR in one state could trigger a wave of adoption nationwide.
The Bigger Picture: A Shift in Public Finance
The push for state-level Bitcoin reserves isn’t merely about technology—it’s about sovereignty, fiscal innovation, and preparing for a decentralized financial future. By treating Bitcoin as a legitimate store of value, states like South Dakota are challenging outdated assumptions about public asset management.
At press time, Bitcoin traded near $98,500, reflecting strong market sentiment ahead of potential macroeconomic shifts. Whether South Dakota becomes the first mover or shares the milestone with another state, one thing is clear: the era of government Bitcoin adoption has begun.
With increasing regulatory clarity, institutional interest, and bipartisan support, digital assets are transitioning from fringe curiosity to core components of national wealth strategies.
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