Key Takeaways
- Kentucky passed HB 701, protecting Bitcoin self-custody and mining.
- The bill exempts Bitcoin mining and staking from securities laws.
- Lawmakers are considering a Bitcoin reserve for state funds.
Kentucky legislators have passed HB 701, a bill aimed at strengthening Bitcoin self-custody rights and creating a supportive environment for mining operations.
The bill, introduced by Representatives Adam Bowling and T.J. Roberts, received unanimous approval from both legislative chambers on March 14 and now awaits the governor’s signature.
Key provisions
HB 701 explicitly protects individuals’ rights to self-custody Bitcoin through privately controlled wallets.
It also prevents discriminatory zoning regulations that could target Bitcoin miners and removes certain financial licensing requirements for small-scale mining operations.
Liability & regulatory clarity
Additionally, the bill ensures that node operators and staking providers are not held liable for validated transactions.
It clarifies that Bitcoin mining and staking services will not be classified as securities or subject to money transmitter regulations, providing greater certainty for industry participants.
Strengthening Bitcoin as payment
The bill also strengthens Bitcoin’s use as a payment method by prohibiting additional taxes or fees beyond those imposed on traditional financial transactions.
The bill states:
Digital assets used as a method of payment shall not be subject to additional taxes, withholdings, assessments, or charges.
Broader implications for Bitcoin adoption
HB 701’s passage aligns with Kentucky’s broader push for Bitcoin adoption.
Lawmakers are also reviewing a separate bill that would allocate a portion of the state’s excess funds to digital assets, with Bitcoin being the only eligible asset based on market capitalization.
