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South Carolina Enacts Law Protecting Self-Custody and Banning State Use of CBDCs

The law bars state agencies from participating in Federal Reserve CBDC pilots, creating a likely federal–state flashpoint if a U.S. CBDC is tested.

Overview

  • Governor Henry McMaster signed Senate Bill 163 into law on Tuesday, May 19, creating state protections for holding and accepting digital assets.
  • The statute forbids state and local agencies from accepting payments in a central bank digital currency or joining any Federal Reserve or federal CBDC pilot programs.
  • The law exempts mining, node operation, staking infrastructure, blockchain development, and crypto-to-crypto trading from money transmitter licensing and limits special local zoning or noise rules targeted at miners.
  • Consumer protections remain: the South Carolina Attorney General keeps authority to pursue fraud in mining and staking services, and large mining firms must demonstrate grid‑impact mitigation under utility oversight.
  • The measure follows a growing wave of state crypto laws and could draw business to South Carolina while also risking legal or political clashes with federal authorities if CBDC testing moves forward.