Kentucky Passes Bitcoin Custody Rights Bill into Law
FRANKFORT, KY — In a major legislative win for cryptocurrency advocates, Kentucky Governor Andy Beshear has signed House Bill 701 into law, officially enshrining key protections for Bitcoin users and businesses in the state. The bill, also known as the "Bitcoin Rights" bill, establishes the right to self-custody digital assets, operate blockchain nodes, and conduct cryptocurrency transactions without discriminatory regulations.
Key Provisions of HB 701
The newly enacted law introduces several crucial protections for cryptocurrency users in Kentucky:
Right to Self-Custody: Residents of Kentucky now have the explicit legal right to store and control their own digital assets without third-party interference.
Blockchain Node Operations: The law ensures individuals can operate blockchain nodes, a fundamental component of decentralized networks.
Protection Against Local Restrictions: The bill prevents municipalities from imposing restrictive zoning or energy policies that target Bitcoin miners or blockchain-related businesses.
Tax and Regulatory Clarity: The legislation eliminates additional taxation on payments made with digital assets and clarifies that cryptocurrency mining and staking activities will not be classified as securities or subject to money transmitter licensing.
Bipartisan Support and Legislative Journey
HB 701 was introduced by Representative Adam Bowling on February 19 and quickly gained traction among lawmakers. The Kentucky House of Representatives passed the bill with a unanimous 91-0 vote on February 28, followed by a 37-0 approval in the State Senate on March 13. Governor Beshear signed the bill into law on March 24, cementing Kentucky’s status as a pro-crypto state.
Growing Momentum for Bitcoin Legislation
The passage of Kentucky’s Bitcoin Rights bill reflects a broader national trend as several states move to adopt crypto-friendly policies. Advocacy groups, including the Satoshi Action Fund, praised the legislation for safeguarding individuals’ rights to use and store digital assets without fear of overregulation.
Other states are considering similar measures. Arizona has two strategic digital asset reserve bills that cleared Arizona’s House Rules Committee on March 24 and are headed to the House floor for a full vote .Kentucky is also exploring additional legislation that could allow the state to hold Bitcoin as part of its reserve funds.
Looking Ahead
With HB 701 now law, Kentucky has positioned itself as a leader in fostering digital asset innovation. The state’s commitment to protecting Bitcoin users and businesses could attract further investment in blockchain technology, solidifying its role in the future of decentralized finance.
As cryptocurrency adoption continues to grow, other states may look to Kentucky as a model for legislative clarity and support in the rapidly evolving digital asset landscape.