A bill that 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 of the states that have started making such motions for new laws include Florida, Missouri, and Arizona.

Currently at press time, Bitcoin price is at $91,824, the asset depreciated by 4% in the last 24 hours. The total market cap is $1.82 trillion with a daily trade volume being $48.24 billion and having an increase rate of 180%.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.