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26.334.22 101st Legislative Session 1155
2026 South Dakota Legislature
House Bill 1155
Introduced by: Representative Manhart
Underscores indicate new language.
Overstrikes indicate deleted language.
An Act to permit the state to invest in Bitcoin. 1
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2
Section 1. That § 4-5-26 be AMENDED: 3
4-5-26. State public funds moneys made available for investment may be invested 4
in the following classes of securities and investments and, except as provided by § 3-12C-5
223; chapter 3-13; chapter 13-63; the permanent school and other educational and 6
charitable trust funds as provided in S.D. Const., Art. VIII, §§ 2 and 7; the permanent 7
trust fund containing the net proceeds from the sale of state cement enterprises as 8
provided in S.D. Const., Art. XIII, § 20; the health care trust fund as provided in S.D. 9
Const., Art. XII, § 5; and the education enhancement trust fund as provided in S.D. 10
Const., Art. XII, § 6; not otherwise: 11
(1) Direct and indirect obligations of the United States government; 12
(2) Agencies and instrumentalities of the United States government; 13
(3) Mortgage-backed securities of United States government-sponsored enterprises; 14
(4) Direct obligations of the State of South Dakota this state and any of its political 15
subdivisions; 16
(5) Obligations consisting of notes, bonds, debentures, and certificates, which are direct 17
obligations of a solvent corporation or trust existing under the laws of the United 18
States or any state thereof, if such the investments are rated in the four highest 19
classifications established by at least two standard rating services at the time of 20
purchase; 21
(6) Savings accounts, share accounts, and certificates of deposit of banks, savings and 22
loan associations, and building and loan associations, and bankers' acceptances; 23
(7) Repurchase agreements fully collateralized by securities described in this section; 24
(8) Shares in exchange -traded funds and open -end, no -load funds that are 25
administered by an investment company registered under the Federal Investment 26
26.334.22 2 1155
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Overstrikes indicate deleted language.
Company Act of 1940, 15 U.S.C. §§ 80a-1 to 80a-64, inclusive (January 1, 2026), 1
whose shares are registered under the Federal Securities Act of 1933 , 15 U.S.C. 2
§§ 77a to 77aa, inclusive (January 1, 2026), and investments are predominantly 3
in securities described in this section; or and 4
(9) Bitcoin that meet the requirements of sections 2 to 5, inclusive, of this Act. 5
In addition to the investments authorized by subdivisions (1) to (8) of this 6
section,inclusive, the investment council the State Investment Council may also allocate 7
a sum certain of state public funds moneys for investment in the accounts and certificates 8
of South Dakota banks and associations. This sum shall must initially be offered to South 9
Dakota banks and associations, and if not initially fully subscribed, the investment officer 10
shall must immediately reoffer the unsubscribed sum to other qualified public depositories 11
defined by subdivision 4-6A-1(7) in § 4-6A-1. 12
Section 2. That a NEW SECTION be added to chapter 4-5: 13
Terms used in sections 2 to 5, inclusive, of this Act mean: 14
(1) "Bitcoin," a digital asset that: 15
(a) Is native to the decentralized peer -to-peer blockchain network that 16
originates from the genesis block created on January 3, 2009; and 17
(b) Maintains an unbroken chain of blocks from the genesis block through the 18
chain recognized by the network of independent nodes as having the 19
greatest cumulative proof of work; 20
(2) "Digital asset," virtual currency, cryptocurrencies, natively electronic assets, and 21
other digital -only assets that confer economic, proprietary, or access rights or 22
powers; 23
(3) "Exchange-traded product," any financial instrument that: 24
(a) Is approved by the Securities and Exchange Commission, the United States 25
Commodity Futures Trading Commission, or the Division of Banking; 26
(b) Is traded on a United States regulated exchange; and 27
(c) Derives value from an underlying pool of assets; 28
(4) "Private key," a unique element of cryptographic data used for signing transactions 29
on a blockchain and known only by the owner; 30
(5) "Qualified custodian," any federal or state -chartered bank, trust company, or 31
special purpose depository institution or company regulated by the Division of 32
Banking, which is authorized to maintain custody of digital assets; 33
26.334.22 3 1155
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Overstrikes indicate deleted language.
(6) "Registered investment company," a financial services company regulated by the 1
United States Securities and Exchange Commission and registered under 15 U.S.C. 2
§§ 77a to 77aa, inclusive (January 1, 2026), and 15 U.S.C. §§ 80a-1 to 80a-64, 3
inclusive (January 1, 2026); and 4
(7) "Secure custody solution," a technological product or blended product and service 5
that meets the requirements set forth in section 5 of this Act. 6
Section 3. That a NEW SECTION be added to chapter 4-5: 7
The amount of state moneys that the State Investment Council may invest in 8
Bitcoin may not exceed ten percent of the state moneys made available for investment. 9
Section 4. That a NEW SECTION be added to chapter 4-5: 10
Any Bitcoin acquired as an investment must be held: 11
(1) Directly by the State Investment Council through the use of a secure custody 12
solution; 13
(2) On behalf of the State Investment Council by a qualified custodian; or 14
(3) In the form of an exchange -traded product issued by a registered investment 15
company. 16
Section 5. That a NEW SECTION be added to chapter 4-5: 17
The secure custody solution required pursuant to section 4 of this Act must have 18
the following characteristics: 19
(1) The private key is exclusively controlled by the State Investment Council; 20
(2) The private key is exclusively contained within an encrypted, hardware -secured 21
environment and is used only to sign and authorize cryptocurrency transactions 22
through end-to-end encryption channels; 23
(3) Passwordless non-asset keys must be included for authentication and endorsement 24
of action to initiate the movement of assets, provided that the keys are stored 25
within a government device; 26
(4) Any hardware that contains the private key is maintained in at least two 27
geographically diverse, secure data centers; 28
(5) The secure custody solution enforces a multi -party governance structure for 29
authorizing transactions, enforces user access controls, and logs all user -initiated 30
actions; 31
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(6) The provider of the secure custody solution has implemented a disaster recovery 1
protocol that ensures customer access to assets in the event the provider becomes 2
unavailable; and 3
(7) The secure custody solution undergoes regular code audits and penetration testing 4
from audit firms, and any identified vulnerabilities are promptly remedied. 5