- Kentucky legislation protects cryptocurrency users and miners against discrimination.
- The state is considering establishing a Bitcoin reserve for public funds.
Kentucky is now officially America’s most crypto-friendly state with the enactment into law of House Bill 701, also known as the Bitcoin Rights bill. Governor Andy Beshear signed the bill into law on March 24, 2025. The legislation aims to safeguard users, miners, and blockchain participants of Bitcoin. The legislation protects against discriminatory control of digital asset holders. It ensures they can keep Bitcoin in self-custody, operate blockchain nodes, and make transactions freely.
HB 701 ensures that citizens have the right to hold and pass on Bitcoin through their wallets, ensuring direct ownership of electronic money. HB 701 also prevents local authorities from applying discrimination regulations against Bitcoin mining activities unjustly. The bill also ensures that staking and mining services will not be defined as securities. This provides legal certainty for businesses engaging in these activities within the state. The second significant provision of the bill exempts staking participants and blockchain node operators from money transmitter laws in Kentucky. This change lowers regulatory hurdles for businesses and individuals participating in blockchain activity.
The bill, which was approved with wide bipartisan support, passed through the Kentucky House in a 91-0 vote on February 28. It then moved through the Senate on March 13 by a vote of 37-0. The swift passage indicates the state’s increasing interest in blockchain technology and financial modernization.
Kentucky Enhances Bitcoin Safeguards with New Legislation
Kentucky will be stepping further towards mainstreaming digital assets in its financial strategy. House Bill 376 would establish a state-sponsored crypto reserve, allowing the State Investment Commission to invest in Bitcoin and other digital assets. The commission could allocate as much as 10% of surplus funds to assets with a market capitalization of over $750 billion. The bill has not passed and is still awaiting a vote in the House. If it passes, Kentucky would be among the first states to count Bitcoin as a treasury asset.
The move by the state mirrors a wider trend throughout the U.S. as additional states consider a Bitcoin-friendly policy. Oklahoma and Arizona are progressing with comparable legislative initiatives, with Oklahoma passing a bill to invest state funds into Bitcoin recently. Nationally, President-elect Donald Trump and Senator Cynthia Lummis have each supported Bitcoin reserves in federal financial policy.
Supporters of Kentucky’s Bitcoin Rights law see it as a safeguard against overregulation and an incentive to promote innovation within the state’s developing blockchain sector. Opponents argue back that investments in digital currencies are risky due to their volatility in the marketplace and uncertainty at the federal level of regulation. Despite dissent, Kentucky’s bold move is part of the trend toward greater Bitcoin use and protection within state financial markets.
The legislative process in Kentucky to pass a bill entails authorization from both legislative houses before reaching the governor’s desk. HB 701 successfully became law. However, HB 376 is still in its initial stages of examination. It has not yet gone through a vote in the House. If passed, it would place Kentucky among the first to create an official Bitcoin reserve.
By passing HB 701, Kentucky has placed itself at the forefront of Bitcoin rights, securing the right of individuals and corporations to do business in the space of cryptocurrency without undue restrictions. While the issue of HB 376 remains ongoing, the state can further anchor its position with the increasing rate of digital assets adoption in the United States.
