South Carolina has officially barred state agencies from accepting or requiring payments in central bank digital currencies issued by the Federal Reserve. Governor Henry McMaster signed Senate Bill 163 on May 19, capping a 17-month legislative effort that also carves out broad protections for cryptocurrency users, miners, and developers. The law makes South Carolina one of more than a dozen US states to pass comprehensive crypto-friendly statutes this year.
A ban on Fed digital dollars
The law adds Chapter 47 to Title 34 of the state code. State agencies cannot take part in Federal Reserve CBDC pilot programs or testing. Privately issued stablecoins backed by legal tender — like USDC — are explicitly exempt from that ban and remain legal to use. The provision is meant to block any future federal digital dollar from being forced onto state transactions.
Protections for wallets, mining, and staking
Individuals and businesses can now accept digital assets as payment for legal goods and services without fear of being blocked. Self-hosted and hardware wallets get formal recognition, meaning users can hold assets without government interference. State and local governments can't tax digital asset payments at higher rates than other payment methods.
Mining operations get relief, too. Local governments can't impose zoning or noise restrictions specifically targeting crypto mining. Node operators, blockchain developers, stakers, and miners are exempt from money transmitter license requirements under certain conditions. Staking-as-a-service and mining-as-a-service providers won't automatically be classified as securities issuers under state law — though the South Carolina Attorney General keeps authority to prosecute fraud involving false claims about those services.
The path to the governor's desk
The bill passed the state Senate with a 38-1 vote. Senators Daniel Verdin and Matthew Leber sponsored the legislation. The lopsided vote came after more than a year of hearings and revisions. The wide definition of digital assets in the law — covering cryptocurrencies, stablecoins, fungible tokens, NFTs, and anything with economic or access rights — helped build broad support.
Part of a broader state-level push
South Carolina joins at least a dozen other US states that have passed similar cryptocurrency protection laws this year. The timing isn't accidental: states have moved to preempt any federal CBDC rollout and to clarify legal treatment of digital assets while Congress debates broader crypto legislation. With SB 163 now law, the state's crypto industry has a clearer set of rules — but the Attorney General's fraud oversight means bad actors still face consequences.
