South Carolina Signs Pro-Crypto Bill Blocking CBDC Payments

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• South Carolina signed Senate Bill 163 into law on May 19.
• The law blocks state participation in Federal Reserve CBDC programs.
• Self-custody wallets and crypto payments receive legal protections.
• Crypto mining and staking operations gain regulatory clarity.
• Privately issued stablecoins are excluded from the CBDC definition.
• Local governments face limits on crypto mining restrictions.

South Carolina has signed a major cryptocurrency-focused bill into law after Governor Henry McMaster approved Senate Bill 163 on May 19, creating one of the state’s broadest digital asset regulatory frameworks. The legislation adds a new Chapter 47 to Title 34 of the South Carolina Code of Laws. It introduces legal protections covering digital asset usage, self-custody rights, cryptocurrency mining operations, and blockchain infrastructure providers.

The bill was sponsored by Senators Daniel “Danny” Verdin and Matthew “Matt” Leber. The legislation was first filed in January 2025 and moved through the legislature over a 17-month period. The South Carolina Senate passed the measure by a 38-1 vote on May 1, 2025. After reconciliation with House amendments in April 2026, the bill was sent to Governor McMaster for final approval.

South Carolina Blocks CBDC Participation

The law prohibits South Carolina government entities from accepting or requiring payments using a central bank digital currency (CBDC). State agencies are also barred from participating in any Federal Reserve or federal government CBDC pilot program or testing initiative.

Under the legislation, a CBDC is defined as a digital currency issued directly by the U.S. Federal Reserve or a federal agency. The bill includes an explicit exclusion stating that a CBDC “does not mean a digital asset backed by legal tender or government treasuries and issued by a private entity.” This exclusion keeps privately issued treasury-backed stablecoins, including USDC, outside the scope of the CBDC restriction.

Self-Custody and Digital Asset Payments Protected

The law states that individuals and businesses cannot be restricted from accepting digital assets as payment for lawful goods and services. It also protects the use of self-hosted wallets and hardware wallets, allowing users to maintain direct control of their digital assets.

In addition, the legislation prevents state and local governments from imposing additional taxes or charges solely because digital assets are used as a payment method. The bill defines digital assets broadly as “virtual currency, cryptocurrencies, natively electronic assets, including stablecoins, fungible tokens, and non-fungible tokens, and other digital-only assets that confer economic, proprietary, or access rights or powers.”

Crypto Mining and Staking Receive Legal Clarity

The framework introduces protections for digital asset mining businesses operating in industrially zoned areas. Local governments are restricted from imposing discriminatory zoning rules, excessive sound limitations, or regulations specifically targeting cryptocurrency mining facilities.

The legislation further clarifies that blockchain node operations, digital asset mining, blockchain software development, and staking services do not require money transmitter licenses under certain conditions. The bill also states that staking-as-a-service and mining-as-a-service providers will not automatically be classified as securities issuers under Title 35 of the South Carolina Code.

At the same time, the law preserves the South Carolina Attorney General’s authority to prosecute fraud involving businesses that falsely claim to provide mining-as-a-service or staking-as-a-service operations.

The legislation also includes energy-related requirements for large-scale mining businesses. Mining firms may be required to provide power purchase agreements to the Public Service Commission to demonstrate the ability to reduce energy consumption during periods of grid stress.

South Carolina joins several U.S. states that have passed similar digital asset or “Bitcoin Rights” legislation between 2024 and 2026, including Oklahoma, Kentucky, Arkansas, Florida, Mississippi, Montana, North Dakota, Louisiana, and Arizona. The legislation reflects continued state-level efforts to establish digital asset policies covering cryptocurrency usage, self-custody rights, blockchain infrastructure, mining operations, and stablecoin treatment. Recently, Republican lawmakers also moved to make the U.S. central bank digital currency (CBDC) ban permanent through proposed amendments tied to the 21st Century ROAD to Housing Act.

Final Takeaway

South Carolina’s Senate Bill 163 establishes a comprehensive state-level framework for digital assets by addressing cryptocurrency payments, self-custody rights, blockchain operations, mining activity, staking services, and CBDC restrictions. The law formally limits state participation in federal CBDC initiatives while preserving the use of privately issued stablecoins.

The legislation also provides regulatory clarity for crypto-related businesses operating in the state, including mining and staking providers, while maintaining consumer protection measures through fraud enforcement authority. With the bill now signed into law, South Carolina joins a growing number of U.S. states adopting digital asset legislation focused on blockchain infrastructure, self-custody protections, and cryptocurrency-related economic activity.

FAQs

1. What does South Carolina’s new crypto law do?
South Carolina’s Senate Bill 163 creates a legal framework for digital assets, including protections for self-custody wallets, crypto payments, mining operations, staking services, and blockchain infrastructure providers.

2. Does the law ban central bank digital currencies (CBDCs)?
The law prohibits South Carolina government entities from accepting or requiring CBDC payments and blocks state participation in Federal Reserve or federal CBDC pilot programs.

3. Are stablecoins affected by the CBDC restriction?
No. The legislation specifically excludes privately issued digital assets backed by legal tender or government treasuries from the CBDC definition, allowing stablecoins such as USDC to remain outside the ban.

4. How does the law impact crypto mining and staking businesses?
The law limits discriminatory local regulations on crypto mining operations and clarifies that certain blockchain, mining, and staking activities do not require money transmitter licenses under specified conditions.

Source: Senate Bill 163