South Carolina Governor Henry McMaster signed Senate Bill 163 into law on May 19, creating a distinct regulatory divide for digital assets at the state level. The legislation shuts the door on central bank digital currencies while widening the lane for Bitcoin, Ethereum, and other decentralized assets.
No CBDCs for State Agencies, Stablecoins Excluded
Under the new law, South Carolina government agencies cannot accept, test, or participate in any CBDC (Central Bank Digital Currency) program linked to the Federal Reserve or the federal government. CBDCs are defined as government-issued digital currencies. However, privately issued stablecoins backed by legal tender or government treasuries — such as USD Coin — remain permitted within the framework.
The legal separation establishes boundaries between public digital payment systems and private blockchain assets. The State Treasurer's Office continues its Digital Assets Literacy Project, focusing on education and evaluation of digital currencies for government and public use.
Self-Custody Rights and Non-Discrimination
The law explicitly protects individuals and businesses using digital assets for lawful payments and transactions. Local governments cannot restrict merchants from accepting cryptocurrency for legal goods and services. Notably, the law strengthens self-custody rights, allowing users to independently store and manage their digital assets. Regulatory and tax authorities are barred from imposing targeted rules or extra tax burdens on crypto users.
Use cases for blockchain technology listed in the bill include financial systems, property transfers, public records, contract management, identity systems, licensing records, and asset authentication. These provisions align with findings from the National Association of State CIOs on blockchain applications in government.
Mining, Staking, and Node Exemptions
Local governments cannot apply discriminatory zoning rules or excessive restrictions on crypto mining facilities. Blockchain node operations, staking services, and software development are exempt from money transmitter license requirements under certain conditions. The state attorney general retains authority to pursue fraud cases involving fake mining or staking schemes.
Part of Broader 'Bitcoin Rights' Wave
South Carolina's S.B.163 follows similar "Bitcoin Rights" legislation passed in Wyoming, Arizona, Oklahoma, Florida, Kentucky, and Montana. These state-level laws collectively signal a clear trend: reject CBDCs, embrace decentralized assets.