The "Strategic Digital Assets Reserve Act of South Carolina" aims to allow the State Treasurer to invest in digital assets, including Bitcoin, as a means to hedge against inflation and diversify the state's financial portfolio. The bill establishes a new Article 5 in Chapter 5, Title 11 of the South Carolina Code of Laws, which outlines definitions related to digital assets, including terms like "cold storage," "secure custody solution," and "qualified custodian." It permits the State Treasurer to invest up to ten percent of unencumbered funds from specified state funds into digital assets, while ensuring that these assets are securely stored and managed according to established best practices.

Additionally, the bill mandates the development of policies for the secure storage and protection of digital assets, including regular independent audits and testing to ensure compliance with security standards. The State Treasurer is required to prepare biennial reports detailing the digital assets held, their value, and any transactions, while also making public the addresses of these assets for transparency. The act allows for the acceptance of donations of digital assets from residents and establishes a framework for the management and oversight of these investments, with provisions set to expire on September 1, 2035, unless renewed.