South Carolina has taken an important step towards integrating digital assets into state-level financial strategies.
On March 27, state lawmakers introduced a new bill to create a Bitcoin reserve to protect public funds from inflation.
At the same time, the state dropped the lawsuit against Coinbase over alleged securities violations related to its staking services.
Bitcoin Reserve Building
Representative Jordan Pace has introduced a new bill that will allow South Carolina to invest some public funds in Bitcoin.
The proposed law, Strategic Digital Asset Reservation Methods (H4256) positions Bitcoin as a protection against inflation and economic instability.
The bill allows state treasurers to allocate up to 10% of the state’s funds to Bitcoin if passed. However, there are strict restrictions. South Carolina cannot hold more than one million BTC.
Meanwhile, the funding for these investments comes from existing sources such as the General Fund and the Budget Stabilization Reserve Fund.
The bill goes a step further by setting transparency standards. You must disclose your wallet address linked to Bitcoin Reserve. This allows citizens to monitor transactions and confirm their blockchain holdings.
With a unique twist, the bill also allows residents to make voluntary Bitcoin contributions. The proposal outlines strict storage requirements to protect assets, such as the use of cold wallets and certified custodians.
Coinbase staking lawsuit has been dismissed
In addition to legislative pushes, South Carolina has decided to withdraw its legal challenges against Coinbase.
The case, filed in June 2023, condemned a crypto exchange for violations of the Securities Act through its staking services.
However, the termination followed an agreement between the state’s securities department and Coinbase.
Coinbase Chief Legal Officer Paul Growal welcomed the news, noting that South Carolina residents missed nearly $2 million in staking rewards during a legal dispute.
Nevertheless, Grewal praised the state’s decision and expressed optimism that other states will follow suit, including California, New Jersey and Illinois.
Meanwhile, the decision reflects a similar move by Vermont, which filed the lawsuit at the beginning of March.
The withdrawal comes shortly after the US Securities and Exchange Commission (SEC) concluded its lawsuit against Coinbase in February.
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