Governor Henry McMaster signed Senate Bill S.163 into law on May 19, 2026, barring South Carolina state agencies from accepting or testing central bank digital currencies (CBDCs). The legislation also establishes tax neutrality for digital assets — meaning they can't be taxed differently than U.S. legal tender — and carves out specific protections for Bitcoin miners. The South Carolina House passed the bill with a bipartisan vote of 110-1.
What the law does
S.163 prohibits any state agency, board, or commission from participating in a CBDC pilot or accepting a CBDC as payment. The ban is a direct response to federal exploration of a digital dollar, which some state lawmakers have argued could threaten privacy and state autonomy. The law doesn't ban private cryptocurrencies — it just keeps the state government out of the CBDC game.
Tax neutrality and miner protections
The tax-neutrality clause means that a Bitcoin transaction won't be hit with a higher tax rate than a dollar transaction just because it's digital. That removes a potential headache for businesses and individuals using crypto in the state. For miners, the law provides exemptions from certain licensing requirements and restricts local governments from passing discriminatory zoning ordinances that would effectively ban mining operations. It's a targeted set of guardrails, not a blanket deregulation.
What comes next
The signing of S.163 is the first half of a two-part push. A separate proposal — 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, with a hard cap of 1 million BTC. That bill has not yet passed. For now, the state has drawn a clear line on CBDCs and thrown up a protective fence around its Bitcoin miners — but the bigger bet on Bitcoin as a state treasury asset is still on the table.
