South Carolina has joined more than a dozen U.S. states in enacting laws that strengthen protections for cryptocurrency users and businesses, notably by prohibiting state agencies from using or participating in any federal central bank digital currency (CBDC) initiatives. Governor Henry McMaster signed Senate Bill 163 into law after it passed the state Senate with near-unanimous support, signaling a strong bipartisan endorsement of crypto-friendly policies.
Senate Bill 163, introduced earlier this year, took over a year to navigate the legislative process before becoming law. The measure defines CBDCs narrowly as digital currencies issued directly by the U.S. Federal Reserve or federal entities, explicitly excluding privately issued stablecoins like USDC from its prohibitions. This distinction allows existing stablecoins to remain legal and widely used within South Carolina.
Beyond banning federal CBDCs, the law provides one of the nation's most detailed frameworks for digital assets, affirming that individuals and businesses cannot be denied the right to accept cryptocurrency payments for lawful goods and services. It formally recognizes self-custodied wallets, including hardware wallets, granting users control over their digital holdings without interference. Additionally, the law prevents state and local governments from imposing higher taxes on crypto payments compared to traditional payment methods.
Comprehensive in scope, the legislation extends legal protections to crypto mining and related businesses. It restricts local governments from applying unfair zoning, excessive noise, or targeted regulations against mining operations. Certain crypto activities such as node operation, blockchain development, staking services, and mining qualify for exemptions from money transmitter licensing requirements under specific conditions.
While the law removes some regulatory obstacles, it maintains consumer safeguards by empowering the South Carolina Attorney General's office to prosecute fraudulent actors who falsely claim to provide crypto-related services. This enforcement mechanism aims to protect residents from scams while fostering a secure environment for legitimate digital asset enterprises.