South Carolina bans CBDC trials, shields Bitcoin miners

South Carolina Gov. Henry McMaster signed Senate Bill 163 into law on Tuesday. The bill passed the state Senate 38-1 and the House 110-1.

The law bars any state agency or political subdivision from accepting, requiring payment in, or participating in Federal Reserve–led digital currency trials, including pilot programs run by federal agencies.

The statute includes protections for crypto users. It prevents state and local governments from restricting the use of hardware wallets and self-hosted wallets and forbids higher taxes on cryptocurrency transactions than on comparable payments in U.S. dollars.

Senate Bill 163 provides explicit protections for digital asset mining operations sited in industrial zones. Local governments may not impose regulations on mining businesses that do not apply to other industrial activities in the same area, and they may not set mining-specific noise limits beyond existing general pollution rules. The bill states, “A political subdivision shall not change the zoning of a digital asset mining business without going through the proper notice and comment. A digital asset mining business may appeal a change in zoning to the proper court of jurisdiction.”

The law requires proper notice and an opportunity for public comment before a political subdivision may change mining zoning and allows mining businesses to appeal zoning decisions in court.

The legislation removes several activities from money transmitter licensing requirements, including mining, node operation, blockchain software development and crypto-to-crypto trading. Providers of mining-as-a-service and staking-as-a-service are excluded from classification as securities under the law.

Supporters framed the measure as protecting consumer choice and preventing local governments from singling out mining operations for rules not applied to other industries. They said the changes would provide regulatory clarity for companies building mining, node and software infrastructure in the state.

South Carolina joins other states that have enacted laws addressing taxation, zoning or licensing for crypto businesses, including Kentucky, Oklahoma, Arkansas, Florida, Mississippi, Montana, North Dakota, Louisiana and Arizona. The new statute establishes state-level limits on participation in federal digital currency pilots and creates specific licensing and zoning rules for digital asset businesses.