South Carolina Signs Bitcoin Mining and CBDC Ban Bill

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South Carolina Gov. Henry McMaster signed Senate Bill 163 into law on May 19, creating a state-level crypto framework that protects self-custody, digital asset payments, mining and node operation while blocking government participation in CBDC programs.

The bill passed the Senate 38-1 and the House 110-1, according to South Carolina legislative records. The act took effect when McMaster approved it.

Self-Custody and Crypto Payments Get Legal Protection

The new law says individuals and businesses cannot be prohibited from accepting digital assets for lawful goods or services. It also protects the use of self-hosted wallets and hardware wallets for self-custody.

State and local governments are barred from imposing extra taxes, withholdings, assessments or charges on a transaction solely because digital assets are used as payment. The same taxes that would apply to a transaction in U.S. legal tender can still apply.

State Agencies Barred From CBDC Payments and Tests

The law prohibits any South Carolina governing authority from accepting or requiring payment using a central bank digital currency. It also blocks state and local governments from participating in any Federal Reserve or federal-government CBDC test.

The statute defines a CBDC as a digital monetary unit issued by the Federal Reserve System or a federal agency and made directly available to institutions or consumers, or processed directly by those entities.

Bitcoin Miners Gain Industrial Zoning Protections

The law gives proof-of-work miners and related operators stronger protection at the local level. In industrial zones, local governments cannot impose restrictions on digital asset mining businesses that do not generally apply to other businesses in the area.

They also cannot single out miners with special sound limits beyond ordinary noise rules or rezone mining businesses without proper notice and comment.

The law also says a money transmitter license is not required solely because a person or business mines digital assets, runs nodes, develops blockchain software or swaps one digital asset for another without converting it into legal tender or bank deposits.

Staking and Node Operators Avoid Extra Licensing Rules

The law says node operators cannot be prohibited from participating in blockchain protocol operations. It also states that businesses providing digital asset mining as a service or staking as a service are not offering security under South Carolina law.

The attorney general still retains authority to bring fraud actions against anyone falsely claiming to offer mining-as-a-service or staking-as-a-service.

For crypto users, the law strengthens self-custody and payment protections. For miners and node operators, it limits discriminatory zoning and licensing treatment. For CBDC opponents, it creates another state-level barrier against future government-backed digital dollar programs.