South Carolina Signs Law Protecting Digital Asset Users

Highlights:

• South Carolina approved Senate Bill 163 to protect crypto payments, wallets, mining, and blockchain services.
• The law blocks state and local authorities from accepting or testing central bank digital currencies.
• Crypto mining firms get zoning protection but must reduce power use during grid stress.

South Carolina has approved a new crypto bill that provides clearer legal protections for digital asset users, miners, and blockchain service providers. Governor Henry McMaster signed Senate Bill 163 on Tuesday, according to LegiScan. The bill creates new rules under Chapter 47 of Title 34 of the South Carolina Code of Laws.

Advertisement

The law prevents state and local authorities from accepting or requiring payment in a central bank digital currency (CBDC). It also bars them from joining any CBDC test program run by the Federal Reserve Board or another federal agency.

🇺🇸 BULLISH: South Carolina Governor signs S.163 into law. The bill protects #Bitcoin self-custody rights, bans discriminatory taxes on Bitcoin, and safeguards proof-of-work #mining in the state. #cryptofactske
bitcoin:native pic.twitter.com/xmYfG8uG8i

— CryptOpus (@ImCryptOpus) May 20, 2026

South Carolina Protects Crypto Payments and Self-Custody

The law allows individuals and businesses to accept digital assets for legal goods and services. It also protects the right to use self-hosted wallets and hardware wallets. These wallets let users hold and control their own crypto assets without relying fully on a third party.

The bill also prevents the state or local governments from adding extra taxes, charges, or assessments only because someone used a digital asset as payment. However, normal taxes can still apply if the same tax would apply to a payment made in U.S. dollars.

This gives crypto users and businesses clearer rules. For example, a customer can pay with digital assets where a business accepts them, but the transaction can still face the same tax treatment as a regular cash or dollar-based payment.

Mining Rules Focus on Zoning and Power Grid Safety

Senate Bill 163 also covers digital asset mining. The law defines mining as using computer hardware and software to validate data and secure a blockchain network. It defines a digital asset mining business as an operation that draws more than one megawatt of power in South Carolina.

For industrial-zoned areas, local governments cannot place special restrictions on digital asset mining businesses unless those restrictions also apply to other businesses in the same area. They also cannot set special sound limits only for mining firms, except through general sound rules that apply in that area. In addition, zoning changes must follow proper notice and comment procedures.

At the same time, the law adds a power-grid safeguard. Mining businesses must operate without placing extra stress on the electrical grid. If requested, they must provide the Public Service Commission with a copy of their power purchase agreement. That agreement must show that the business can reduce power use during periods of grid stress.

Nodes, Software Developers, and Staking Services Get Clarity

The bill says some crypto-related activities do not require a money transmitter license. These include digital asset mining, operating blockchain nodes, developing blockchain software, and exchanging one digital asset for another without exchanging digital assets for legal tender or bank deposits.

It also protects the ability to operate blockchain nodes. A node is software that helps maintain a blockchain by communicating with other participants, validating blocks, or keeping a copy of the blockchain.

The law further states that businesses offering digital asset mining as a service or staking as a service are not offering a security under Title 35. However, the Attorney General can still bring fraud action against any person or business that falsely claims to offer mining or staking services.

The bill passed the House on May 5, 2026, by a vote of 110-1. The Senate earlier passed it on second reading on May 1, 2025, by a vote of 38-1. The law took effect after the governor approved it.

Advertisement