South Carolina has introduced a new legislative framework for digital assets, emphasizing self-custody rights and limiting state engagement with central bank digital currencies. Governor Henry McMaster signed Senate Bill 163 into law, which updates the state’s approach to cryptocurrencies and blockchain technology.
The law ensures that individuals and businesses can accept digital currencies as payment without being prohibited. It also protects the right to use self-hosted or hardware wallets for storing digital assets. Additionally, state and local governments cannot impose extra taxes or fees on cryptocurrencies used for transactions.
A key provision bars state agencies, commissions, departments, and political subdivisions from accepting CBDC payments or participating in Federal Reserve pilot programs related to government-issued digital currencies. This move aligns with growing opposition to CBDCs among Republican lawmakers, who raise concerns about surveillance and financial privacy.
The legislation also provides legal protections for cryptocurrency mining. Local governments cannot enforce mining-specific noise restrictions in industrial areas beyond existing regulations. Furthermore, several blockchain activities, including mining, node operation, application development, staking infrastructure, and crypto-to-crypto trading, are exempt from money transmitter licensing requirements.
Definitions for blockchain, digital assets, wallets, nodes, mining, and staking have been formally added to the South Carolina Code of Laws. Similar efforts have emerged in other states, such as Kentucky, which recently enacted a bill protecting self-hosted wallets and preventing discriminatory restrictions on crypto mining.