South Carolina Governor Henry McMaster signed S.163 into law on May 20, 2026, making the state one of the most explicit in the country about what it will not permit a central bank digital currency to do within its borders — and what it will protect for crypto miners and stakers.
The law adds Chapter 47 to Title 34 of the South Carolina Code of Laws. Its core prohibition is direct: no state or local governing authority may accept or require payment using a central bank digital currency, and no government entity may participate in a CBDC pilot or test program. Alongside that ban, the law bars digital asset operations from facing disparate zoning treatment, blocks digital currency transactions from being taxed at a higher rate than equivalent US dollar transactions, and explicitly provides that those operating digital asset mining businesses or providing mining-as-a-service or staking-as-a-service are not offering a security under state law. Mining operators are required only to provide grid usage information to the Public Service Commission on request — a disclosure obligation rather than a licensing requirement.
The bill passed the South Carolina General Assembly on May 6, 2026, with near-unanimous margins: the Senate cleared it 38–1 in its May 2025 reading, and the House passed it 110–1 in May 2026. That arithmetic reflects something beyond partisan enthusiasm for crypto; it is legislative consensus that the state's position on both CBDC and digital asset infrastructure should be codified in statute rather than left to regulatory discretion.
S.163 is not the only bill shaping South Carolina's posture. A companion measure, S0163's related provisions protecting digital asset transactions by residents and businesses, signals that the legislature's anti-CBDC sentiment is structural. The state is building a statutory floor against federal digital currency incursion rather than reacting to a single news cycle.
South Carolina's action arrives in a week when other states are also drawing their own lines on digital assets. Minnesota Governor Tim Walz signed HF 3709 into law on May 16, 2026, authorizing state-chartered banks and credit unions to offer regulated crypto custody services effective August 1 — making Minnesota the first Midwestern state to establish a unified legislative framework covering both institution types under a single law.
The policy implication for an analyst tracking US digital asset regulation is the patchwork problem. South Carolina's CBDC prohibition applies to every government payment interaction within the state. If a future federal CBDC were introduced, any mandate to use it for state tax payments, benefit distributions, or procurement would run directly into this statute. State attorneys general would hold enforcement authority. The more states codify these prohibitions, the narrower the federal on-ramp for a retail CBDC becomes — not because Congress couldn't preempt state law, but because a patchwork of active state bans creates political friction that makes federal rollout more costly to defend.
The mining and staking protections operate differently. They set a regulatory floor: operators in South Carolina know they will not face security law exposure for providing these services, will not be zoned out of industrial districts on crypto-specific grounds, and will not be hit with discriminatory tax rates. That floor matters for infrastructure siting decisions. It does not guarantee favorable conditions — grid compliance and public disclosure requirements remain — but it removes the three vectors that most commonly produce legal uncertainty for mining operators considering a new jurisdiction.
Sources: South Carolina General Assembly bill history and text, S.163 (scstatehouse.gov); The Block, May 20, 2026; CU Today / TradingView reporting on Minnesota HF 3709.