On May 19, South Carolina governor Henry McMaster signed into law S. 163, establishing a regulatory framework for digital assets and cryptocurrency in the state. The law prohibits any state governing authority from accepting or requiring payment using central bank digital currency (CBDC) or participating in any test of CBDC by the Fed or other federal agency. The law also protects the right of individuals and businesses to accept digital assets for legal goods and services and to maintain self-custody through self-hosted or hardware wallets. The law provides that digital asset transactions may not be subjected to additional taxes or charges solely because the transaction used a digital asset rather than U.S. legal tender, though otherwise applicable state and local taxes remain in effect.

The law exempts individuals and businesses engaged in digital asset mining, operating blockchain nodes, developing blockchain software, or exchanging one digital asset for another from money transmitter licensing requirements, and provides that businesses offering digital asset mining as a service or staking as a service are not offering a security. The law also includes zoning and electrical grid protections for mining operations and preserves the attorney general’s authority to prosecute fraud in connection with mining or staking services. The law took effect upon the governor’s signature.