South Carolina bars state agencies from participating in CBDC programs

South Carolina has passed a new cryptocurrency law that protects self-custody rights, limits state involvement with central bank digital currencies, and removes several licensing requirements tied to blockchain activity.

South Carolina Governor Henry McMaster signed Senate Bill 163 into law on Tuesday, updating the state’s legal framework around digital assets and adding a series of protections for crypto users, miners, and blockchain businesses.

Under the legislation, individuals and companies cannot be barred from accepting cryptocurrencies as payment for goods or services. The law also protects the right to hold digital assets in self-hosted or hardware wallets, preventing restrictions on self-custody practices within the state.

State and local governments are additionally prohibited from placing extra taxes, fees, or assessments on cryptocurrencies used as a payment method, according to the bill’s text.

South Carolina adds anti-CBDC restrictions

Alongside the payment and custody provisions, the legislation includes language targeting central bank digital currencies.

State agencies, commissions, departments, and political subdivisions are barred from accepting payments in a CBDC or participating in any Federal Reserve pilot program tied to a government-issued digital currency.

The provision arrives as opposition to CBDCs has continued gaining traction among Republican lawmakers across the U.S. Congress. Earlier this month, Congressman Mike Flood said House Republicans revised the Senate’s version of the 21st Century ROAD to Housing Act to remove what he described as a “backdoor green light for a CBDC” by eliminating a 2030 expiration clause tied to a temporary restriction.

Elsewhere on Capitol Hill, Representative Warren Davidson argued that allowing the restriction to expire would effectively create a future pathway for a U.S. digital dollar rollout. House Majority Whip Tom Emmer has also continued promoting his Anti-CBDC Surveillance State Act, which seeks to permanently block the Federal Reserve from issuing a CBDC.

Criticism of central bank digital currencies has largely centered on surveillance and financial privacy concerns. At the same time, the Human Rights Foundation previously stated that CBDCs could improve access to financial services while also creating risks tied to government control and user privacy.

Outside the U.S., data from the Atlantic Council shows that Nigeria, Jamaica, and the Bahamas have already launched CBDCs, while dozens of countries remain in testing or research phases.

Back in South Carolina, the newly signed law also provides legal protections for crypto mining operations. Local governments cannot impose mining-specific sound restrictions in industrial areas beyond existing noise regulations that already apply to the zone.

Several blockchain-related activities are also now exempt from money transmitter licensing rules under the legislation. Those exemptions cover crypto mining, node operation, blockchain application development, staking-related infrastructure, and crypto-to-crypto trading activity.

Definitions for blockchain, digital assets, wallets, nodes, mining, and staking were also formally added to the South Carolina Code of Laws as part of the measure.

Similar state-level efforts have surfaced elsewhere in the U.S. over the past year. In March 2025, Kentucky enacted House Bill 701, which protected the use of self-hosted wallets and blocked local governments from introducing discriminatory restrictions against crypto mining businesses.