United States – South Carolina

Licensing, Authorisation & Market Access

South Carolina licenses and regulates money transmitters and currency-exchange institutions under the South Carolina Uniform Money Services Act, administered by the Attorney General's Money Services Division rather than a banking regulator. The 2024 modernization, Act No. 218, substantially adopted the multistate Money Transmission Modernization Act model law, raising licence fees to $1,600 and updating net worth, surety bond, permissible investment and control-definition provisions. This MTMA harmonisation reduces multistate licensing friction for transmitters operating across state lines.

Conduct, Safeguarding & Financial Promotions

South Carolina money transmitters must maintain a surety bond of $50,000 plus $10,000 per additional office, capped at $250,000, and a net worth of at least $250,000. The state does not separately mandate a customer-fund segregation or trust model, leaving safeguarding resting on solvency-style capital requirements rather than fund segregation.

Stablecoins & Digital Money

South Carolina enacted S.163, ratified May 14, 2026 and signed by Governor McMaster, barring state governing authorities from accepting or requiring CBDC payments or participating in federal CBDC pilots. The law protects self-custody rights and excludes privately issued asset-backed stablecoins from the CBDC definition, positioning the state as increasingly crypto-friendly.

A pending bill, the Strategic Digital Assets Reserve Act (Bill 4256), introduced March 27, 2025, would let the State Treasurer invest unencumbered state funds in digital assets including Bitcoin, capped at 1 million BTC and 3% of the state's digital-asset investment portfolio, subject to independent annual custody audits. It remains in the Ways and Means committee and has not been enacted.

Operational Resilience & Critical Infrastructure

South Carolina has no payments-specific operational-resilience or critical-infrastructure statute comparable to the EU's DORA in force. The applicable standing framework is the state's general data-breach notification statute, in force since 2009. A related standing framework, the South Carolina Insurance Data Security Act, effective January 1, 2019, requires licensees to notify the Director no later than 72 hours after determining a cybersecurity event meeting materiality thresholds, modeled on the NAIC Insurance Data Security Model Law.

Scheme & Network Compliance

South Carolina has no state-specific card-interchange or surcharge statute in force; card-network compliance operates under the federal baseline, including the Durbin Amendment debit-interchange cap and the Expressions Hair Design v. Schneiderman surcharge-disclosure jurisprudence. The state's own scheme-adjacent statute, the Financial Transaction Card Crime Act, defines an 'acquirer' as authorizing merchants to accept card payments and criminalizes fraudulent submission of transaction records not resulting from an actual sale as a felony.

Payment Corridor Dynamics

Cross-border remittance flows through South Carolina are channeled via nationally licensed money transmitters, such as Western Union, operating through South Carolina-registered authorized delegates under the Uniform Money Services Act, with FinCEN MSB registration as the federal precondition. No South Carolina-specific corridor policy exists; corridor access rides on the general money-transmitter-licence and agent framework.

Industry Structure & Commercial Dynamics

78% of all South Carolina bank deposits were held in out-of-state banks in 2023, alongside a net decrease of 233 bank branches statewide against a net increase of 24 credit union branches over the same period. South Carolina law bars local governments from depositing taxpayer funds in credit unions, confining public deposits to traditional banks. A coalition of credit unions and local governments, the Palmetto Public Deposits Coalition, is pushing to change that law, opposed by the SC Bankers Association.

Legal & Litigation

South Carolina's Attorney General joined a 47-state, $80 million multistate settlement with Block, Inc. over alleged BSA/AML program deficiencies tied to Cash App; Block also agreed to hire an independent compliance consultant.

Outlook

This settlement is the standing enforcement marker for the baseline window; further multistate coordinated actions against non-bank payment platforms are the pattern to monitor.

Merchant Acquiring & Risk

No licensing, bonding, background-check, or registration requirement exists for merchant cash advance funders or brokers operating in South Carolina, in contrast to the state's regulated payday-lending regime.

Outlook

This gap is treated as not applicable within the current regulatory posture rather than a research shortfall; it remains a dated entry to monitor for any future legislative activity.

Product Innovation & Market Development

Named South Carolina institutions live on FedNow include Bank of York, Dedicated Community Bank, and Security Federal Bank; nationally FedNow reached 1,400+ participants by July 2025, with community banks and credit unions comprising roughly 80% of participants. Separately, S.163 is framed as a competitiveness and innovation play intended to attract miners, blockchain operators and crypto-friendly capital to South Carolina, joining states like Kentucky in enacting self-custody and anti-discrimination protections.

Consumer Protection & APP Fraud

South Carolina's 2021 elder financial exploitation law (S.425) allows financial institutions, including banks, credit unions, broker-dealers and investment advisers, to decline, delay, or report transactions suspected of financially exploiting vulnerable adults aged 55 and older, without requiring such action, and exempts good-faith actors from liability. No South Carolina-specific authorized-push-payment fraud mandatory reimbursement regime comparable to the UK's exists; reliance is on federal Regulation E and card-network zero-liability policies.

AML/CFT & Financial Crime

This module's intelligence is sourced from the Sentinel.gi feed; original illicit-finance analysis is not re-performed here. All South Carolina money transmitters must be licensed under the South Carolina Anti-Money Laundering Act, with FinCEN MSB registration a precondition to state licensure. South Carolina participated in the 47-state, $80 million multistate settlement with Block, Inc. over BSA/AML program deficiencies tied to Cash App, which required an independent consultant review of AML program comprehensiveness.

Correspondent Banking, Settlement & Access

South Carolina's correspondent-access landscape is shaped by an asymmetry between bank and non-bank market participants. State law confines public deposits to traditional banks, excluding credit unions, even as 78% of South Carolina deposits sit in out-of-state institutions. Rural branch closures are straining local correspondent and settlement access.

Outlook

Correspondent-access strain is likely to intensify as deposit-market consolidation and rural branch contraction continue, keeping the public-deposit restriction a live point of political contest.

Commercial Intelligence (M&A, Investment & Product)

Huntington Bancshares closed its acquisition of Dallas-based Veritex Holdings on October 19, 2025, and is targeting market-share expansion into North Carolina and South Carolina with plans to build dozens of new branches; deal value was not publicly disclosed. Carter Bankshares, a Virginia-based bank, opened a loan production office in South Carolina in November 2025 and is considering acquiring a bank to widen its Carolinas footprint, especially in South Carolina; this is a rumoured, early-stage move with no target or valuation disclosed.