South Carolina Enacts Pro-Crypto Law, Sets Limits on CBDC Use

South Carolina is enacting a pro-cryptocurrency law that explicitly protects the mining industry and other parts of the digital-asset sector.

The Block reported on May 19 that South Carolina Governor Henry McMaster signed crypto bill S.163 on May 18. The measure is designed to create a more favorable regulatory environment for digital-asset companies and users operating in the state.

S.163 says individuals and businesses cannot be prohibited from accepting digital assets as payment for goods and services. It also protects the right to hold digital assets directly through self-hosted wallets and hardware wallets.

The law also bars the state and local governments from imposing separate taxes, withholdings, assessments or fees when digital assets are used as a means of payment.

The measure also puts protections for the crypto mining industry into law. Under S.163, local governments cannot restrict crypto mining operations in industrial zones. They are also barred from applying noise standards to mining companies that are stricter than general noise rules in the area.

The law also sets limits on central bank digital currencies, or CBDCs. Specifically, South Carolina state agencies, commissions and subordinate bodies are prohibited from using CBDCs for payments. They also cannot participate in similar currency experiments conducted by the Federal Reserve.

S.163 also includes definitions of basic concepts such as blockchain, digital assets, mining, wallets and staking.