South Carolina Governor Henry McMaster signed Senate Bill 163 into law on May 19, barring state agencies from CBDC transactions, shielding Bitcoin miners from discriminatory local rules, and removing several crypto operations from money transmitter licensing requirements. The bill passed both chambers with nearly unanimous support. The Senate approved it 38 to 1; the House of Representatives voted 110 to 1.
CBDC Payments Blocked for State Agencies
No state agency or political subdivision in South Carolina can now accept payments in a central bank digital currency, require its use, or participate in any Federal Reserve CBDC pilot program. The prohibition also covers broader federal digital currency pilots that involve state entities.
The right to hold assets independently also gained explicit protection. State authorities cannot restrict the use of hardware wallets or independently hosted storage. For crypto holders watching federal debates over non-custodial wallet oversight, this state level guarantee offers a concrete legal anchor.
A third provision removes tax inequality. Imposing higher tax rates on crypto transactions than on comparable payments made in US dollars is now prohibited. Without waiting for federal action, South Carolina resolved this disparity at the state level.
Bitcoin Miners Protected from Local Pressure
Mining businesses operating in industrial zones received a specific set of guarantees against arbitrary municipal decisions. Local governments cannot impose restrictions on mining operations that do not apply to other industrial businesses in the same zone. Noise limits stricter than general industrial standards cannot be applied exclusively to mining sites.
The law also sets a clear procedure for zoning changes. To reclassify land where a mining company operates, a municipality must complete a public notice and comment process. The business owner can then appeal any zoning change in court. Before SB 163, local authorities could alter zoning without these requirements.
Self-custody rights for Bitcoin and other digital assets are protected here too: state agencies cannot restrict the use of hardware wallets or any independently deployed storage solution. Together, these provisions cover both individual asset holders and mining operators.
Licensing Changes and New Status for Crypto Services
Four types of activity are now exempt from money transmitter licensing: mining, running network nodes, blockchain software development, and one cryptocurrency for another trading. In many US states, money transmitter registration requires an insurance deposit, AML compliance, and regular reporting. For small operators, that is a real entry barrier that is now gone in South Carolina.
Infrastructure providers got clarity too. Mining as a service and staking as a service are officially excluded from securities classification. Without this law, a regulator could treat their offerings as investment products, triggering registration obligations under securities rules.
Both changes give crypto businesses a predictable operating environment. Rather than waiting for federal guidance, operators can now plan based on a specific state statute.
South Carolina Joins a Growing State Level Push
South Carolina joined a group of states building their own crypto legal frameworks without waiting for Washington. Kentucky passed the Bitcoin Rights Act in March 2025 with similar provisions covering self-custody rights and miner protections. Several other states have either enacted comparable legislation or have it under consideration.
The 110 to 1 House vote stands out even in this context. The numbers speak for themselves. Support from members of both parties shows that protecting crypto holders and entrepreneurs has moved past purely partisan lines. While the federal Congress continues to negotiate full regulatory packages, individual states are already passing concrete rules.
For operators choosing a jurisdiction for mining capacity or company registration, a law like SB 163 is a practical factor. Clear legal protection lowers regulatory risk and simplifies business planning. If South Carolina holds this course, the state is positioned to become one of the more crypto friendly regions in the US.
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