A bill that has sought to enable South Dakota tap state money to invest in Bitcoin has been blocked. House Bill 1202, introduced by Representative Logan Manhart, proposed creating a Bitcoin reserve for South Dakota. The bill aimed to allow the state to invest up to 10% of its total portfolio in Bitcoin.
However, the lawmakers referred the bill, which means that its progress was halted for this legislative session.
State Bitcoin Reserve Plan Fails as South Dakota Lawmakers Defer
South Dakota House Commerce and Energy Committee refused to move HB 1202 to the next level. The proposed bill sought to facilitate the state to buy Bitcoins using public funds; the state would actually become one of the pioneers in holding a Bitcoin reserve.
But the lawmakers made it difficult for the process by voting to take the bill to the next stage after 40 days which brought an end to it for the year.
The bill was introduced by Representative Logan Manhart and he plans to propose the bill during the next year 2026. The deferral reflects concerns about regulatory uncertainties, market volatility, and the risks associated with using public funds for crypto investments.
Despite these concerns, Bitcoin reserve proposals continue to emerge in other states, indicating ongoing interest in integrating digital assets into public investment strategies.
Meanwhile, Bitcoin Strategy continues to gain traction with institutional adoption as Michael Saylor’s firm expands its holdings. MicroStrategy, now rebranded as Strategy, has nearly 500,000 BTC after its latest $2 billion purchase.
Concerns Over Volatility and Regulation
The primary concerns cited for deferring HB 1202 were Bitcoin’s price volatility and the lack of clear federal regulations. Opponents of the bill argued that investing in a highly fluctuating asset could expose public funds to financial risk.
The unpredictability of Bitcoin prices made some lawmakers hesitant to approve the allocation of taxpayer money toward a digital asset.
Moreover, crypto regulation uncertainty at both the state and federal levels also played a role in the bill’s stagnation. With the legal landscape surrounding Bitcoin reserves still evolving, lawmakers expressed caution about moving forward without clearer guidelines. The deferral follows similar rejections in other states, such as North Dakota and Montana, where Bitcoin reserve proposals also failed to gain approval.
Although HB 1202 failed to pass, discussions around state-held Bitcoin reserves are expected to continue. Some states, including Florida, Missouri, and Arizona, have introduced similar proposals, keeping the debate on cryptocurrency investments active.
At press time, Bitcoin price is $91,824, reflecting a 4% decline over the past 24 hours. The market cap stands at $1.82 trillion, with a 24-hour trading volume of $48.24 billion, showing an increase of 180.96%.
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