South Carolina has enacted Senate Bill 163, creating a comprehensive crypto-friendly regulatory framework that passed with overwhelming support. The legislation received unanimous approval in the Senate (38-1) and House (110-1), with Governor Henry McMaster signing it into law. According to reports from CoinDesk, the legislation includes provisions that protect self-custody rights, allow businesses to accept digital assets for payments, and remove several licensing requirements tied to blockchain activity.
The legislation includes significant restrictions on central bank digital currencies, with state agencies, commissions, departments, and political subdivisions barred from accepting payments in a CBDC or participating in any Federal Reserve pilot program tied to a government-issued digital currency. As reported by CoinDesk, this provision arrives as opposition to CBDCs has continued gaining traction among Republican lawmakers across the U.S. Congress, with recent efforts to remove what some describe as a 'backdoor green light for a CBDC' from housing legislation.
Under the new law, individuals and companies cannot be barred from accepting cryptocurrencies as payment for goods or services, and the legislation protects the right to hold digital assets in self-hosted or hardware wallets, preventing restrictions on self-custody practices within the state. According to the bill's text, state and local governments are additionally prohibited from placing extra taxes, fees, or assessments on cryptocurrencies used as a payment method, and the legislation prevents governments from imposing higher taxes on crypto transactions than on comparable payments made in U.S. dollars.
The legislation provides legal protections for crypto mining operations, with local governments unable to impose mining-specific sound restrictions in industrial areas beyond existing noise regulations. As reported by CoinDesk, several blockchain-related activities are now exempt from money transmitter licensing rules, covering crypto mining, node operation, blockchain application development, staking-related infrastructure, and crypto-to-crypto trading activity. The law also formally added definitions for blockchain, digital assets, wallets, nodes, mining, and staking to the South Carolina Code of Laws. Additionally, mining-as-a-service and staking-as-a-service providers are excluded from securities classification, and mining businesses may appeal zoning changes in court.
South Carolina joins a growing group of states adopting crypto-friendly legislation, with Kentucky passing a Bitcoin Rights bill in March 2025 and several other states including Oklahoma, Arkansas, Florida, Mississippi, Montana, North Dakota, Louisiana, and Arizona approving similar measures in recent years. The legislation comes as criticism of central bank digital currencies has largely centered on surveillance and financial privacy concerns, with the Human Rights Foundation previously stating that CBDCs could improve access to financial services while creating risks tied to government control and user privacy. This state-level competition over digital asset policy reflects the ongoing debate between federal and state regulatory approaches to cryptocurrency regulation.
