South Carolina Enacts Bitcoin-Friendly Law, Bans CBDC Use by State Entities

A notable development has hit the crypto markets. Bitcoin Magazine South Carolina Enacts Bitcoin-Friendly Law, Bans CBDC Use by State Entities South Carolina has enacted a new law aimed at establishing a clear and supportive framework for cryptocurrency use, marking one of the most comprehensive state-level efforts to date. Governor Henry McMaster signed Senate Bill 163 into law on May 19 after it passed the legislature with strong bipartisan support, clearing the Senate in a 38–1 vote and the House in a 110–1 vote. The measure amends the state’s legal code to define key digital asset activities while outlining protections for users, businesses, and infrastructure tied to the sector.

At the core of the legislation is a provision that affirms the right of individuals and businesses to use digital assets like bitcoin in commerce. The law states that no entity may be prohibited from accepting cryptocurrencies as payment for goods and services. It also guarantees the right to hold assets in self-hosted or hardware wallets, reinforcing the principle of self-custody.

Market Dynamics

The bill further prevents South Carolina and local governments from imposing additional taxes or fees on transactions that involve digital assets when those assets are used as a method of payment. Lawmakers framed this provision as a way to ensure parity between digital assets and U. dollars in commercial use.

South Carolina: No CBDC use by state actors Another key element of the South Carolina law is its stance on central bank digital currencies. The legislation bars any state agency, department, or political subdivision from accepting or requiring payments in a CBDC.   It also prohibits participation in any testing program tied to a Federal Reserve-issued digital currency.

The measure reflects concerns among some policymakers about privacy, financial surveillance, and federal overreach. The law also includes protections for cryptocurrency mining operations, a sector that has sought clearer rules at the state level. Local governments are restricted from imposing limits on mining businesses in industrial zones that differ from those applied to other industries in the same areas.

Market Impact

Noise regulations must align with general standards rather than rules that target mining operations. In addition, several crypto-related activities are exempt from money transmitter licensing requirements. These include mining, running network nodes, developing blockchain-based software, and engaging in crypto-to-crypto transactions.

Other States passing pro-bitcoin measures South Carolina joins a growing group of states pursuing legislation that supports digital asset adoption. Kentucky passed a similar measure in 2025 that protected self-custody rights and limited local restrictions on mining. Missouri’s House Bill 2080, introduced by Ben Keathley, would also establish a state-managed Bitcoin reserve fund allowing the treasurer to acquire, hold, and oversee bitcoin under strict custody, reporting, and long-term holding requirements.

163 signals a continued push at the state level to shape crypto policy in the absence of a unified federal framework, with lawmakers seeking to attract investment while addressing concerns tied to emerging financial technologies. This post South Carolina Enacts Bitcoin-Friendly Law, Bans CBDC Use by State Entities first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.