Former CFTC chair Timothy Massad warned that the US CBDC ban represents a political facade rather than actual policy, speaking at London's Digital Money Summit on May 19, 2026. Massad stated that while the US doesn't have a central bank president who will publicly advocate for wholesale or retail CBDC, "that does not mean that we are not looking at how to create one." His comments come as South Carolina has enacted Senate Bill S.163, which prohibits state agencies from accepting or requiring payment in central bank digital currency. The legislation received overwhelming bipartisan support with a vote of 110-1 in the House, demonstrating genuine conviction across political lines.
The new law creates a tax-neutral environment for digital currency transactions, ensuring that digital assets cannot be singled out for disparate tax treatment compared to traditional fiat currency transactions. As reported by legislative documents, the framework permits individuals and businesses to use digital currency for transactions while restricting certain activities for digital currency operations zoned for industrial use. The legislation also provides that digital mining businesses must not place additional stress on electrical grids and must provide certain information to the Public Service Commission upon request. Under the new law, individuals and businesses cannot be prohibited from accepting digital assets as payment for goods and services, or from using self-hosted wallets or hardware wallets to maintain self-custody of their holdings. The law states that no entity may be prohibited from accepting cryptocurrencies as payment for goods and services, and guarantees the right to hold assets in self-hosted or hardware wallets, reinforcing the principle of self-custody.
The legislation establishes significant protections for digital asset mining operations, including shielding proof-of-work mining from discriminatory zoning and noise ordinances. According to the bill's provisions, local governments are barred from placing restrictions on mining businesses in industrially zoned areas that do not apply to other businesses in the same zone, or from imposing sound limits beyond the area's general noise regulations. Mining operations, node operation, on-chain software development, and crypto-to-crypto trading are all explicitly exempt from money transmitter licensing requirements. The Attorney General is granted authority to prosecute individuals or businesses fraudulently claiming to offer digital asset mining as a service or staking as a service. These protections reflect concerns among some policymakers about privacy, financial surveillance, and federal overreach, with the measure designed to attract investment while addressing emerging financial technology concerns.
Mark Gould, the Federal Reserve's chief payments executive, acknowledged that while a digital dollar is not currently within the Fed's remit, it would become the central bank's responsibility if one were ever introduced. This position aligns with Massad's warning that the US risks losing influence over global digital payment standards by stepping back from international experiments. Massad pointed to Project Agora as evidence of continued US engagement, noting that the BIS initiative involves the Federal Reserve Bank of New York and six other central banks, testing tokenized deposits alongside wholesale central bank money on a programmable platform. House Republicans pushed on May 19, 2026 to make the CBDC ban permanent inside a major housing bill, following Trump's original executive order in early 2025 prohibiting federal agencies from developing a CBDC.
A separate House Bill, H.4256, would allow South Carolina's treasurer to allocate up to 10% of unallocated state funds into Bitcoin as an inflation hedge, capped at 1,000,000 BTC. As reported by legislative sources, this provision would establish Bitcoin as a strategic reserve asset for the state, representing a structural buyer class that doesn't sell on market downturns. The combined legislative package positions South Carolina as a leader in state-level digital asset adoption and regulatory clarity, joining a growing list of states enacting crypto-friendly legislation, following Kentucky which passed similar self-custody and mining protection legislation in March 2025. Missouri's House Bill 2080, introduced by Ben Keathley, would also establish a state-managed Bitcoin reserve fund allowing the treasurer to acquire, hold, and oversee bitcoin under strict custody, reporting, and long-term holding requirements.
