The Kentucky legislators have passed HB 701, a Bill to strengthen the right to self-custody Bit and create a friendly environment for cryptocurrency mining activities across the state.
This Bill, introduced by Representatives Adam Bowling and T.J. Roberts, was unanimously passed by both legislative chambers on 14/03.
Kentucky's Pro-Bit Policy
HB 701 strengthens individual rights by clearly allowing self-custody of digital assets like Bit through privately controlled wallets. It also protects Bit mining activities by preventing discriminatory zoning regulations that could unfairly target Miners.
Additionally, it eliminates certain financial licensing requirements for small-scale Miners, reducing barriers to entry for independent individuals participating in the industry.
The Kentucky Senate emphasized these protections on X (formerly Twitter), stating that the Bill shields node operators and Staking providers from legal liability for confirmed transactions.
It also ensures that digital asset mining and Staking remain exempt from money transmission and securities regulations. The Attorney General's office is empowered to enforce these exemptions.
"[The Bill] protects node operators and Staking providers from legal liability for confirmed transactions and exempts digital asset mining and Staking from money transmission and securities regulations. The Attorney General's office is authorized to enforce the violations," the Kentucky Senate explained on X.
Meanwhile, a key provision of the Bill clarifies that Bit mining and Staking services will not be classified as securities. This distinction provides greater regulatory certainty for industry participants.
Beyond mining and self-custody, the HB 701 Bill protects the rights of individuals to use digital assets for payments. It prohibits any additional taxes or fees on digital asset transactions beyond those applicable to standard financial payments.
Collectively, this provision aims to enhance the utility of Bit as a medium of exchange within the state.
"Digital assets used as a payment method shall not be subject to any additional taxes, deductions, assessments, or fees solely based on the use of the digital asset as a payment method," the Bill states.
With approval from both chambers, the Bill is now awaiting the governor's signature. If signed into law, it will solidify Kentucky's reputation as a crypto-friendly state and encourage further innovation in the digital asset space.
Meanwhile, the passage of HB 701 comes as lawmakers are considering a separate Bill to establish a Bit reserve. This initiative would allocate a portion of Kentucky's surplus funds into digital assets, providing the state with an alternative store of value.
While the Bill does not specifically mention Bit, it refers to digital assets—excluding stablecoins—with a market capitalization exceeding $750 billion. Bit's current market capitalization is $1.7 trillion, making it the sole asset that meets these criteria.
Although this proposal is still under consideration, Kentucky's proactive approach places it among the states driving greater Bit adoption.
