S. 163, titled “Cryptocurrency,” creates a new chapter in Title 34 of the South Carolina Code to regulate how state and local governments may interact with digital assets and central bank digital currency (CBDC). The bill bars any governing authority from accepting or requiring payment in CBDC and from participating in federal CBDC testing. It also protects the use of digital assets, including cryptocurrencies, stablecoins, and non-fungible tokens, for lawful purchases and self-custody through hardware wallets or self-hosted wallets.
The bill further limits state and local governments from singling out digital-asset transactions for extra taxes, assessments, or charges solely because the payment medium is digital, while preserving taxes that would apply to the same transaction if paid in U.S. legal tender. It also restricts disparate zoning treatment for digital asset mining businesses, especially in industrial areas, and requires such businesses to avoid adding stress to the electrical grid and to provide power purchase agreements to the Public Service Commission upon request. In addition, the bill exempts certain blockchain-related activities from money transmitter licensing and states that digital asset mining as a service and staking as a service are not securities under Title 35.
The bill’s practical legal effect is to add statutory protections for cryptocurrency users, miners, node operators, and staking providers, while limiting regulatory burdens from state and local governments. It would amend South Carolina law to define key blockchain and digital-asset terms, create express protections for digital asset payments and custody, and carve out licensing exemptions for mining, node operation, and certain digital-to-digital exchanges. It also preserves the Attorney General’s authority to pursue fraud against anyone falsely claiming to offer mining or staking services.
Overall sentiment appears strongly favorable in the Legislature. The bill passed the Senate 38-1 and later passed the House 105-1, indicating broad bipartisan support with only minimal opposition. The committee report recommended passage, and the fiscal note suggests little to no administrative or fiscal impact on affected agencies under current conditions.
The main points of contention are implied rather than documented in transcript debate. The bill’s limits on zoning authority, utility-grid impacts, and financial regulation could concern local governments, regulators, and critics of cryptocurrency mining, especially given the energy demands of mining operations. Supporters appear to favor consumer choice, digital-asset innovation, and regulatory certainty, while the narrow opposition likely reflects concerns about preemption of local control, environmental or grid stress, and reduced oversight of crypto-related businesses.
The bill would add Chapter 47 to Title 34 of the South Carolina Code and create new statewide rules governing digital assets, blockchain activity, and CBDC. It would prohibit state and local governing authorities from accepting or requiring CBDC payments, restrict additional taxation of digital-asset payments, limit zoning discrimination against mining operations, exempt certain blockchain activities from money transmitter licensing, and declare that mining-as-a-service and staking-as-a-service are not securities. It also preserves fraud enforcement authority for the Attorney General and would take effect upon gubernatorial approval.
Legislative sentiment appears overwhelmingly positive. The bill cleared the Senate 38-1 and the House 105-1, and the committee report recommended that it pass. The near-unanimous votes suggest broad support for the bill’s pro-crypto, anti-CBDC, and regulatory-limitation framework, with only isolated opposition.
The likely areas of contention are the bill’s restrictions on local zoning and sound limits for mining businesses, its exemption of certain blockchain activities from money transmitter licensing, and its declaration that staking-as-a-service and mining-as-a-service are not securities. Critics may view these provisions as limiting local control and financial oversight, while supporters likely see them as necessary to protect innovation and prevent discriminatory treatment of digital-asset businesses. The bill also raises policy concerns about electrical grid stress, though it requires mining businesses to avoid additional stress and to provide power purchase agreements to the PSC on request.