South Carolina enacts digital asset law as federal crypto policy shifts

By AI, Created 10:46 PM UTC, May 26, 2026, /AGP/ – Governor Henry McMaster signed S163, the Freedom Financial Act, into law in South Carolina the same day President Trump issued an executive order aimed at reducing federal barriers to fintech, digital assets and blockchain innovation. The law sets new state guardrails on self-custody, taxation, mining and CBDC use, with supporters saying it could help draw investment and jobs.

Why it matters: - S163 gives South Carolina a formal legal framework for digital assets, which could reduce uncertainty for businesses and users operating in the state. - The law is designed to support innovation while keeping consumer protections and grid reliability in place. - Supporters say the measure could attract investment, talent and companies in digital assets and related emerging-tech sectors. - The bill also signals a stronger state-level position on financial sovereignty and resistance to Central Bank Digital Currency activity.

What happened: - Governor Henry McMaster signed S163, the Freedom Financial Act, into law in South Carolina. - President Trump signed a major executive order the same day, directing federal regulators to reduce barriers for fintech, digital assets and blockchain innovation. - The South Carolina bill passed with strong bipartisan margins: 38-1 in the Senate and 110-1 in the House. - Rep. Mark Smith (R-District 99) presented the bill on the House floor. - The South Carolina Emerging Tech Association advocated for the measure through engagement with lawmakers and stakeholders.

The details: - S163 protects self-custody and use of self-hosted wallets for lawful transactions by individuals and businesses. - The law bars discriminatory taxes on digital assets and treats digital asset transactions the same as U.S. legal tender for tax purposes. - Mining and node operations are allowed in industrially zoned areas, with protections intended to prevent undue stress on the electrical grid. - Mining, node operations and staking-as-a-service are exempt from certain licensing requirements. - The law prohibits state and local governments from accepting, requiring or participating in tests of Central Bank Digital Currencies. - The Attorney General can prosecute fraudulent “mining as a service” and “staking as a service” schemes. - Rep. Mark Smith said 15% of South Carolinians already own digital assets and argued the state needs a modern regulatory framework. - Mark Smith said the bill includes clear definitions, protections against Central Bank Digital Currencies, the right to use digital assets in lawful transactions and practical guardrails. - Mark Smith said the bill had backing from banking and municipal associations and no opposition. - Dennis Fassuliotis, president and founder of SCETA, said the law removes regulatory uncertainty and signals that South Carolina is open for business in emerging technologies. - Fassuliotis also said the timing of the law and the federal executive order creates state-federal synergy and positions South Carolina as a competitive hub for blockchain, fintech, digital finance, energy tech and compute industries. - SCETA is a 501(c)(6) nonprofit focused on Payments, Identity, Energy and Compute, and says it works on policy, industry collaboration and economic development in South Carolina. - SCETA’s contact number is +1 843-543-0710. - The organization links to its social media at its X account.

Between the lines: - The law reflects a broader push among state leaders to set clearer rules before federal policy settles. - The pairing of a state crypto law with a federal executive order gives supporters a narrative of momentum for digital asset adoption. - The strongest practical impact may be on companies deciding where to locate mining, staking and other blockchain-related operations.

What’s next: - South Carolina will now move from legislation to implementation, including how agencies and local governments apply the new rules. - The law’s effect on investment and job creation will depend on whether companies view the state as a stable and cost-effective place to build. - Enforcement around fraud and compliance will likely become the main test of how the framework works in practice.

The bottom line: - South Carolina just staked out one of the clearest pro-crypto policy positions in the country, pairing market access with specific guardrails.