TheBlock
South Carolina Governor Henry McMaster signed S. 163 into law on Tuesday, establishing a comprehensive crypto-friendly framework that codifies the right to self-custody, bars state agencies from accepting or testing a Federal Reserve CBDC, and shields mining operations from local zoning and noise restrictions. The bill also exempts crypto used as payment from any additional state or local tax, withholding, or assessment, and carves out mining, node operations, onchain development, and crypto-to-crypto trading from money-transmitter licensing.
Why it matters
The law's anti-CBDC clause is the highest-signal piece: it bars any state agency, board, commission, department, or political subdivision from accepting CBDC payment or participating in any Federal Reserve test of one. Layered on top of the self-custody guarantee — individuals and businesses cannot be prohibited from using self-hosted or hardware wallets — South Carolina has now drawn a hard state-level line against the architecture of a programmable, government-issued retail digital currency. Several other states passed similar packages last year, with Kentucky enacting House Bill 701 in March 2025 to enshrine the right to self-custody and block local ordinances discriminating against miners. The combined effect is a federation of state-level opt-outs that, taken together, constrain how far a future federal CBDC rollout could reach inside US borders.
Market impact
For the US mining sector, the protections are concrete: local governments cannot restrict mining in industrial zones, nor impose crypto-specific sound limits beyond general noise-pollution rules. That removes a recurring friction point for operators — community-noise lawsuits and discretionary zoning denials — that has shaped where hash power is sited. The money-transmitter carve-outs for mining, node operations, non-custodial development, and crypto-to-crypto trading also lower compliance overhead for protocol-level participants who previously had to navigate state-by-state licensing.
Frequently asked questions
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What does South Carolina's new crypto law actually do?
S. 163 codifies the right to self-custody via self-hosted or hardware wallets, bars state agencies from accepting or testing a Federal Reserve CBDC, exempts crypto used as payment from additional state or local tax, and shields mining operations in industrial zones from local zoning and crypto-specific noise…
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Does the law ban CBDCs in South Carolina?
It bans any state agency, board, commission, department, or political subdivision from accepting CBDC payment or participating in any Federal Reserve test of a CBDC. It does not prohibit private use of a digital dollar — it cuts off the state-level rails a CBDC would need to function inside South Carolina.
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How does the law protect crypto miners?
Local governments cannot restrict mining in industrial zones and cannot impose crypto-specific sound-level limits beyond the area's general noise-pollution regulations, closing the door on the discretionary zoning and community-noise playbook that has shaped where miners can site.
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What activities are exempt from money-transmitter licensing?
Crypto mining, node operations, developing onchain applications, and crypto-to-crypto trading are carved out of South Carolina's money-transmitter licensing requirements, reducing compliance overhead for non-custodial protocol participants.
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Which other US states have passed similar crypto laws?
Kentucky enacted House Bill 701 in March 2025, guaranteeing the right to self-custody and barring local governments from passing discriminatory laws against crypto mining. South Carolina's S. 163 is the latest entry in a growing state-level bloc of pro-crypto, anti-CBDC statutes.
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