The Kentucky Senate has passed a landmark bill protecting Bitcoin self-custody and mining rights, sending House Bill 701 (HB 701) to the Governor’s desk for final approval.
The legislation passed unanimously in a 37-0 vote on Thursday, cementing protections for individuals and businesses using digital assets while limiting local government interference.
The bill, sponsored by Representatives Adam Bowling and T.J. Roberts, ensures Kentucky residents can store and manage Bitcoin through self-hosted wallets without regulatory restrictions. It also prevents local governments from using zoning laws to shut down or discriminate against Bitcoin mining businesses.
“This is about personal financial freedom and keeping government overreach out of Bitcoin,”
-Bowling said, emphasizing the bill’s role in reinforcing self-custody rights.
Key Provisions
HB 701 includes sweeping protections for Bitcoin holders and miners, making Kentucky one of the most crypto-friendly states in the U.S. The legislation:
- Protects Bitcoin self-custody: Individuals can legally store and manage Bitcoin in self-hosted wallets without restrictions.
- Prevents discriminatory zoning laws: Local governments cannot enact zoning regulations specifically targeting digital asset mining businesses.
- Exempts mining operations from money transmitter requirements: Home miners and businesses no longer need a money transmitter license to operate.
- Clarifies securities regulations: Digital asset mining and staking services are explicitly not classified as securities under Kentucky law.
- Shields node operators and staking providers from liability: Those validating blockchain transactions are protected from legal responsibility related to the transactions they process.
T.J. Roberts noted the importance of removing barriers to Bitcoin adoption. “We are making sure that Bitcoin miners in Kentucky can operate without being unfairly targeted,” he said.
Strong Bipartisan Support
HB 701 received overwhelming bipartisan backing in the Kentucky House, passing with a 91-0 vote on February 28 before heading to the Senate. The unanimous 37-0 approval in the Senate signals broad political alignment.
The Kentucky Senate Majority Caucus reinforced the bill’s significance in a social media post, stating that it “protects the use of digital assets and self-hosted wallets, prevents local zoning discrimination against digital asset mining businesses, and establishes guidelines for blockchain node operations.”
If signed into law, the bill positions Kentucky as a leader in Bitcoin-friendly regulations, contrasting with states that have pursued stricter oversight. The Attorney General’s Office will enforce violations, ensuring that businesses and individuals comply with the new framework.
Kentucky’s decision comes as the broader crypto market experiences heightened volatility. While state lawmakers advanced the bill, Bitcoin’s price rebounded 6.2% on Friday, recovering from a four-month low.
Analysts cited macroeconomic shifts, including tariff concerns and inflation trends, as primary drivers of recent market fluctuations.
With the bill awaiting the Governor’s signature, Kentucky is set to establish itself as a haven for Bitcoin holders and mining businesses, reinforcing its commitment to digital asset innovation.
