Yesterday reintroduced Rep. Jordan Pace Bill H. 4256, “Strategic Digital Assets reserve South Carolina” in South Carolina’s Representant House.
Highlights from the bill include the fact that it allows treasurer to invest up to 10% of the funds under the state’s leadership in digital assets, including Bitcoin, and that the state’s strategic digital assets reserves may include up to one million bitcoin.
The bill also says that the reason for establishing such a reserve is because “inflation has eroded the purchase force for assets contained in state funds” and that “Bitcoin, a decentralized digitally asset, and other digital assets offer unique properties that can act as a hedge against inflation and economic volatility.”
The bill does not determine whether state officials should hold the private keys to Bitcoin and other digital assets, as it accumulates for the reserve, although it allows treasurer to develop policies and protocols to protect the assets in the reserve, including the use of cold storage or contracting of a third party to maintain the custody of assets. Treasurers can also use a third party to help with the creation, maintenance and administration of the reserve’s safety.
According to the bill, the treasurer would be responsible for preparing a two -year report that includes the total amount of digital assets contained in the reserve, the US dollar value of these assets and transactions and expenses related to the reserve since the previous report. The state treasurer would also be obliged to publish evidence of reserves that include the public addresses of the digital assets held in the reserve at an official state site, enabling citizens to independently revise and verify the reserve’s inventory.
Finally, the Bill determines that the strategic digital asset reserve undergoes audits that include a study of the quality of the security solutions; an assessment of compliance with local, state and federal laws; and an evaluation of internal controls to mitigate against cyber attacks and wrong leadership.
According to the bill, the independent audits should be implemented annually and submitted to the relevant supervisory committee. Any recommendations that are the result of the independent audits must be processed within 90 days of the issue of the report, and a follow -up report that describes the corrective actions taken must also be delivered to the Supervisory Committee.