South Dakota’s House Bill 1202, which aimed to allocate up to 10% of the state’s investment portfolio in Bitcoin, has been blocked by lawmakers. The bill, introduced by Representative Logan Manhart, sought to establish a Bitcoin reserve for the state, but the South Dakota House Commerce and Energy Committee voted to defer it, halting its progress for the legislative session.
The proposal, which would have allowed South Dakota to invest public funds in Bitcoin, lacked sufficient support due to concerns about the cryptocurrency’s volatility and regulatory uncertainties. While Bitcoin’s price fluctuations and unclear regulations at both state and federal levels were major factors, proponents of the bill argue that these challenges don’t diminish the potential benefits of integrating digital assets into state investment strategies.
Representative Manhart has indicated plans to reintroduce the bill in 2026, despite the concerns raised. The proposal’s failure follows similar setbacks in other states, such as North Dakota and Montana, where Bitcoin reserve initiatives also faced opposition.
Despite the setback in South Dakota, Bitcoin’s institutional adoption continues to grow, exemplified by firms like MicroStrategy, now rebranded as Strategy, which holds nearly 500,000 BTC following a $2 billion purchase.
The discussion around state-backed Bitcoin reserves is expected to persist, with states like Florida, Missouri, and Arizona exploring similar initiatives.
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