South Carolina Representative Jordan Pace has reintroduced a new legislative proposal, Bill H.4256, in the State Assembly.
This proposal aims to allow the state’s treasurer to invest up to 10% of state funds into cryptocurrencies.
Crypto Reserve Proposal
The proposed legislation is designed to enable a specific percentage of state-managed funds to be allocated to cryptocurrencies. The law envisions a system called a strategic cryptoasset reserve, which could contain up to one million different crypto assets.
The bill cites current economic conditions and inflation as factors eroding the purchasing power of state funds. It suggests that the unique attributes of cryptocurrencies could serve as a buffer against inflation.
Audit and Reporting Processes
The treasurer will develop necessary policies to ensure the security of the acquired crypto assets, which may include employing cold wallet storage methods or collaborating with third-party service providers. This aims to implement various measures for the protection and security of the assets.
Additionally, the law requires the treasurer to present a detailed report every two years, encompassing the total value of crypto assets, transactions, and expenditures. This report will be published on the official website and presented as “proof of reserves” to allow citizens to conduct independent audits.
The created reserves will be subject to independent audits annually to ensure compliance with local, state, and federal regulations, as well as measures against cyberattacks. A 90-day correction period is proposed for any deficiencies identified in the audit report.
Detailed regulations for the implementation, chosen security protocols, and external auditing mechanisms are deemed crucial for the sustainability of the investment and the effective use of public resources. In this context, the legislative proposal serves as a measure against economic fluctuations and aims to create a controlled environment for users within its jurisdiction.
