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 "Bitcoin," "cold storage," 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 investments adhere to secure storage practices and risk mitigation strategies. The bill also mandates the development of policies for the secure management of these assets and prohibits any actions that could undermine the security of the digital asset network.

Additionally, the bill requires the State Treasurer to prepare biennial reports on the digital assets held in the reserve, including their value in U.S. dollars, and to publish public addresses of these assets for transparency. It allows for the acceptance of donations of digital assets from residents and mandates regular independent audits to ensure compliance with established standards. The provisions of this act will expire on September 1, 2035, unless renewed.