HB1202

This bill permits the State of South Dakota to invest up to 10% of its available state funds in Bitcoin, a digital asset regulated by the Securities and Exchange Commission. The bill establishes comprehensive definitions and strict requirements for Bitcoin investments, including detailed specifications for secure custody solutions. Specifically, the bill defines key terms like "digital asset," "exchange-traded product," and "qualified custodian," and mandates that Bitcoin investments must be held directly by the State Investment Council through a secure custody solution, by a qualified custodian, or in the form of an exchange-traded product. The secure custody solution must meet rigorous security standards, such as ensuring private keys are exclusively known and accessible by the government, contained in an encrypted environment, never stored on a smartphone, maintained in geographically diverse secure data centers, and subject to multi-party governance, user access controls, transaction logging, and regular security audits. The bill amends existing investment statutes to include Bitcoin as a permissible investment vehicle, reflecting a cautious and technologically informed approach to incorporating cryptocurrency into state investment strategies.