Kentucky Governor Signs HB701 Law Protecting Self-Custody, Node Operation, and Bitcoin Usage, Banning Discriminatory Regulations on Mining Activities.
On March 24, Kentucky Governor Andy Beshear signed House Bill 701 (HB701), officially placing the state among the leading U.S. states in establishing legal rights for digital asset usage and storage, particularly Bitcoin. Unofficially called the "Bitcoin Rights Law," HB701 protects self-custody rights, node operation, and Bitcoin transaction participation, while prohibiting discriminatory forms of cryptocurrency mining activities.
According to the Satoshi Action Fund, HB701 is considered a foundational legal document for the digital asset ecosystem in Kentucky. The law affirms individuals' rights to self-manage private keys and digital assets without intermediary organizations - known as self-custody rights. Additionally, HB701 ensures the right to operate decentralized network nodes and use digital assets for transactions, provided they do not violate other legal regulations.
Submitted by Representative Adam Bowling on February 19, the bill quickly received near-unanimous consent in both legislative chambers. The Kentucky House passed HB701 with a 91-0 vote on February 28, while the Senate unanimously approved it on March 13 with 37 affirmative votes. Governor Beshear's signing on March 24 completed the legislative process, bringing the main provisions into effect.
The law also introduces important regulations protecting digital asset mining activities. Specifically, HB701 prohibits local governments from issuing discriminatory or obstructive regulations on Bitcoin mining. Moreover, the law excludes mining and Staking from money transfer law applications and confirms that these activities are not considered securities offerings under federal or state law.
HB701's content shares many similarities with the law previously passed in Oklahoma, in an effort to establish a clear and digital asset-friendly legal framework. Simultaneously, the Kentucky legislature is also considering another bill to establish a state-level Bitcoin reserve fund.
If passed, this bill would allow the State Investment Commission to allocate up to 10% of budget surplus to digital assets, including Bitcoin - marking a bold step in public asset management strategy.
At the federal level, Kentucky's move occurs amid other states actively promoting legal initiatives related to Bitcoin. In Oklahoma, the Strategic Bitcoin Reserve Act - proposed by Representative Cody Maynard - passed the House with 77 votes in favor and 15 against, after being approved by the Government Oversight Committee with a 12-2 ratio. The bill is currently awaiting Senate review.
According to the Bitcoin Laws tracking group, Oklahoma and Texas are leading efforts to establish state-level Bitcoin reserve funds, paving the way for cryptocurrency asset integration into local fiscal policy.
