South Carolina has enacted legislation that prohibits state and federal agencies from accepting or ordering payments from central banks in digital currencies. The law also provides comprehensive protection for cryptocurrency mining and value-added services, making it one of the most legitimate digital laws to come out of the US federal legislature this year.
What the law does
The bill, billed as HB 4256, has two main points. First, it prohibits any South Carolina state or local government from accepting or ordering payments from CBDCs. Second, the law creates a better environment for digital mining and mining. It limits support for mining facilities, meaning that local governments cannot simply evict crypto miners as some municipalities have tried in other countries.
The law also defines certain mining and staking operations as unsafe. The bill also protects mining and deposit operations from other licensing provisions that may apply.
Arguments against CBDC are picking up steam
A separate South Carolina bill, S0163, also looks at the use of CBDCs and includes protections for digital assets held by individuals and businesses. The fact that multiple bills on the same issue have passed through the state legislature shows that anti-CBD sentiment in South Carolina runs deeper than a single law.
South Carolina’s digital financial game
The new law is not South Carolina’s first foray into the digital space. The State Treasurer’s Office has launched the Digital Assets Literacy Project for the 2022-2023 fiscal year, with the goal of educating residents and policymakers about blockchain technology and digital currencies.
What does this mean for crypto investors and miners
By declaring mining and mining operations unsafe and shielding them from burdensome regulatory and licensing requirements, the government is hanging up an “open for business” banner on companies that have spent the past few years stymied by inconsistent regulations.
