Summary
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Kentucky Governor Beshear signed HB 701 into law, guaranteeing residents the right to self-custody cryptocurrencies like Bitcoin, a move backed by unanimous bipartisan support in the state legislature.
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The new law establishes Kentucky as a crypto-friendly state by preventing discriminatory regulations against crypto mining, clarifying that mining and staking are not securities, and exempting blockchain nodes and staking from money transmitter rules.
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In addition to enacting HB 701, Kentucky is also considering HB 376, a separate bill that could allow the state to invest up to 10% of its excess reserves in digital assets like Bitcoin, though this bill is still under legislative review.
Governor Andy Beshear of Kentucky officially enacted House Bill 701 (HB 701) on Monday, cementing legal safeguards for the use of Bitcoin and other cryptocurrencies within the state.
This legislative measure garnered strong bipartisan endorsement, evidenced by its unanimous passage in both the Kentucky House of Representatives, with a 91-0 vote on February 28th, and the Senate, with a 37-0 vote on March 13th. Following these votes, the bill was presented to the Governor for final signature.
HB 701, formally titled “An Act relating to blockchain digital assets,” introduces several significant provisions designed to cultivate a supportive regulatory environment for cryptocurrencies within Kentucky.
A central aspect of the new legislation is the guarantee of individuals’ rights to maintain and control their cryptocurrency holdings through self-hosted wallets. This provision ensures that Kentuckians can exercise full autonomy over their digital assets, free from external intervention.
Furthermore, the law places limitations on local government bodies, preventing them from implementing discriminatory regulations that disproportionately target cryptocurrency mining operations.
It also provides clarity on the regulatory classification of crypto activities, stipulating that both mining and staking services are not to be considered securities under Kentucky law.
In addition, the legislation explicitly exempts the operation of blockchain nodes and engagement in staking activities from the state’s regulations governing money transmitters.
Kentucky Joins Growing Trend of Crypto-Supportive US States
This legislative development aligns with a wider trend across various U.S. states towards adopting a more accommodating stance on cryptocurrencies, coinciding with the increasing levels of adoption among both institutional and retail investors.
Utah recently implemented comparable legislation, integrating cryptocurrency into the state’s legal framework and signaling support for citizens’ participation in crypto and blockchain-related activities.
State Bitcoin Reserve Under Consideration in Separate Bill (HB 376)
Concurrently, Kentucky is currently deliberating on a separate legislative proposal, House Bill 376 (KY HB376), which outlines the potential creation of a cryptocurrency reserve at the state level.
House Bill 376 proposes authorizing the State Investment Commission to allocate up to 10% of the state’s surplus reserves to digital assets, specifically targeting those with a market capitalization exceeding $750 billion—effectively encompassing Bitcoin.
This bill is still undergoing legislative review and has not yet been finalized into law, awaiting further deliberation and voting in the House.
HB 376 Awaits House Vote in Kentucky’s Legislative Process
In Kentucky’s legislative procedure, enactment necessitates passage by both the House and the Senate, followed by the Governor’s signature. HB 376, the bill concerning a potential Bitcoin reserve, is presently awaiting a vote within the House of Representatives.
Also Read: Gouvernor of Utah Authorises blockchain and digital innovation mission
Utah Governor Spencer Cox signed H.B. 335 into law, creating the Blockchain and Digital Innovation Task Force. The task force will make policy recommendations on blockchain and related technologies to promote the use of blockchain, financial technology, and digital innovation in the state. The task group will consist of up to 20 members, with the president of the Senate, speaker of the House of Representatives, and governor each nominating up to five members from the remaining…[Read More]
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