TL;DR
- The governor of Kentucky signed HB 701 into law on March 25, 2025, granting legal protections for cryptocurrency use in the state.
- The law guarantees residents the right to manage cryptocurrencies in self-hosted wallets and establishes that mining and staking will not be considered securities.
- Kentucky is also evaluating the HB 376 proposal to create a cryptocurrency reserve, allowing up to 10% of its reserves to be invested in digital assets like Bitcoin.
On March 25, 2025, Kentucky Governor Andy Beshear signed House Bill 701 (HB 701) into law, which grants new legal protections for cryptocurrency use in the state.
This law guarantees residents the right to store and manage their cryptocurrencies in self-hosted wallets, meaning users can have complete control over their digital assets without the need for intermediaries.
The legislation, which was unanimously approved in both chambers of the Kentucky Legislature, aims to foster a favorable environment for cryptocurrency and blockchain use. Specifically, HB 701 establishes that local authorities cannot enact laws that discriminate against cryptocurrency mining operations and clarifies that both mining and staking services are not considered securities under Kentucky law.
Kentucky Joins the List of Pro-Crypto States
Another important provision of the law is that blockchain-related activities, such as operating nodes and staking, will be exempt from the regulations applied to money transmitters. This will facilitate the development and adoption of blockchain-based technologies by removing regulatory barriers for crypto market investors.
This legislative approach is part of a broader trend that has gained momentum in several U.S. states, seeking to integrate more closely with the crypto industry. Utah, for example, recently passed a similar law to allow citizens to actively participate in cryptocurrency and blockchain activities.
On the other hand, Kentucky is also evaluating an additional bill, HB 376, which proposes the creation of a cryptocurrency reserve for the state. This bill would allow the State Investment Commission to allocate up to 10% of state reserves to purchase digital assets, specifically Bitcoin. However, this proposal is still under discussion and has not yet been approved.
With the signing of HB 701 and the proposal of HB 376, Kentucky is moving toward a more inclusive environment for the cryptocurrency industry, a crucial step in adopting blockchain and fostering innovation within the digital economy
