Kentucky lawmakers have passed HB 701, a bill that enhances Bitcoin self-custody rights and protects crypto mining operations. The bill received unanimous support and is now awaiting the governor’s signature. If enacted, it could strengthen Kentucky’s image as a pro-crypto state.
Representatives Adam Bowling and T.J. Roberts introduced the bill. It allows individuals to manage their digital assets without interference. It also protects Bitcoin miners from unfair zoning regulations that could limit their activities. Furthermore, the bill removes certain licensing requirements for small-scale miners, making it easier for them to enter the industry.
The Senate Majority in Kentucky emphasized the importance of these protections. Node operators and staking providers will not be liable for validated transactions. The bill clarifies that Bitcoin mining and staking are exempt from securities and money transmitter regulations. This change creates a more favorable environment for businesses in the crypto space. The Attorney General’s Office will enforce these exemptions.
A key provision of HB 701 is that Bitcoin mining and staking services will not be classified as securities. This clarification provides regulatory certainty, reducing legal risks and encouraging investment in Kentucky’s crypto sector.
In addition to self-custody and mining protections, the bill safeguards the use of digital assets for payments. It states that digital assets used for payment will not incur extra taxes or fees beyond standard financial transactions. This aims to promote Bitcoin as a medium of exchange and boost its everyday use.
Both legislative chambers approved HB 701, which is now awaiting the governor’s signature. If signed, it will enhance Kentucky’s status as a blockchain-friendly state, potentially attracting more businesses and innovation in the digital asset sector.
Lawmakers are also considering a proposal to create a Bitcoin reserve. This would allow Kentucky to invest surplus funds in digital assets as an alternative store of value. While still under review, this reflects a trend among states embracing cryptocurrency. Kentucky’s pro-Bitcoin policies position it as a leader in blockchain adoption and innovation.
