Three things South Carolina can do now to prepare for the digital currency era | Opinion

We are in the midst of a federal digital asset revolution — one poised to upend archaic banking paradigms, create radical new efficiencies and allocate unprecedented financial power to the people. It is critical that South Carolina act in concert with these efforts and not get left behind.

On Jan. 23, just three days after his inauguration, President Donald Trump issued an executive order aimed at promoting the growth of emerging technologies like cryptocurrency and blockchain. Around the same time, Mark Uyeda, the acting chair of the Securities and Exchange Commission, announced the formation of a cryptocurrency task force “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.”

This marks a major turnaround for the SEC, which had previously treated cryptocurrencies as investment contracts, asserting sweeping oversight authority over the fledgling technology and bringing repeated enforcement actions against major players and pioneers. The New York Times reported last month that the enforcement division is already being pared back.

Trump has also announced the formation of a national strategic cryptocurrency reserve as a hedge against future economic uncertainty and named five cryptocurrencies for the new stockpile, including the two largest, Bitcoin and Ethereum.

Embracing innovation isn’t the forte of the federal government — and it’s a change of pace from the recalcitrance of the prior administration.

So what does it mean for South Carolina?

It means the Palmetto State needs to lay a foundation for the coming digital asset deluge. Our leaders haven’t done a whole lot to date.

Back in 2020, at the behest of state Sen. Tom Davis, R-Beaufort, the South Carolina Senate adopted a resolution “to acknowledge the importance of emerging blockchain technology and to call upon the residents of South Carolina to join in encouraging the promotion of blockchain technology in our state.” Then, in 2022, the General Assembly allocated $500,000 to the state Treasurer’s Office for a digital currency literacy program aimed at studying digital assets and preparing educational materials for audiences of varying age levels.

To date, those funds have not been expended.

So there is much more that South Carolina can and must do to prepare for the digital currency era — from incentivizing blockchain workforce development to attracting more economic development on the digital asset front.

The first step should be amending our commercial code. In 2022, the nonpartisan Uniform Law Commission offered amendments to the Uniform Commercial Code addressing emerging technologies, providing updated rules for commercial transactions involving virtual currencies and distributed ledger technologies, including blockchain.

Adoption of these amendments is critical to providing consistency and legal certainty in the ever-evolving technological landscape. They would clarify the legal treatment of digital assets, providing consistent and predictable rules for transactions. Twenty-five states and the District of Columbia have enacted these changes. We should not be the last.

Next, we should amend the state definition of “data centers” to include bitcoin mining facilities. Back in 2012, South Carolina passed legislation to attract data centers run by companies like Google and Meta, offering incentives like sales tax exemptions on electricity and equipment to build and maintain operations.

These traditional data centers, which operate 24/7, cannot curtail energy use during peak demand periods. By contrast, Bitcoin miners and mobile data centers are less resource-intensive and capable of giving back energy to the grid on a moment’s notice (as they did during 2022’s winter storm Elliot). South Carolina already has a cluster of mining facilities in Anderson, Union and Spartanburg counties. Why not offer them the same considerations as those given to companies that do nothing but take energy?

Third, we should think about our own strategic bitcoin reserve. No fewer than 21 states are now investing — or considering investing — in digital assets in the interest of investment diversity. Again, South Carolina should be leading the pack — not trailing it.

The future is now, and South Carolinians are hearing a lot of novel lingo and paradigm-shifting new ideas. But today’s lesson is this: We cannot drag our feet.

Let us act now, in the spirit of innovation and progress, to secure our economic future and keep pace with states already positioning themselves as digital leaders. Let’s keep South Carolina competitive.

This story was originally published March 4, 2025 at 6:00 AM with the headline "Three things South Carolina can do now to prepare for the digital currency era | Opinion."