Kentucky Enacts Bitcoin Rights Bill, Becomes Most Crypto-Friendly State

Kentucky has taken a significant step towards embracing cryptocurrency by enacting House Bill 701, also known as the Bitcoin Rights bill. Governor Andy Beshear signed the legislation into law on March 24, 2025, making Kentucky the most crypto-friendly state in America. The bill aims to protect users, miners, and blockchain participants of Bitcoin, ensuring they can operate freely without discriminatory control.

The legislation guarantees that citizens have the right to hold and pass on Bitcoin through their wallets, ensuring direct ownership of electronic money. It also prevents local authorities from unjustly applying discrimination regulations against Bitcoin mining activities. Additionally, the bill ensures that staking and mining services will not be defined as securities, providing legal certainty for businesses engaging in these activities within the state. Furthermore, the bill exempts staking participants and blockchain node operators from money transmitter laws in Kentucky, lowering regulatory hurdles for businesses and individuals participating in blockchain activity.

The bill, which received wide bipartisan support, passed through the Kentucky House with a 91-0 vote on February 28 and moved through the Senate with a 37-0 vote on March 13. This swift passage indicates the state’s growing interest in blockchain technology and financial modernization.

Kentucky is also considering further steps to mainstream digital assets in its financial strategy. House Bill 376, if passed, 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. This move would place Kentucky among the first states to count Bitcoin as a treasury asset.

The trend of states considering Bitcoin-friendly policies is growing. Oklahoma and Arizona are progressing with comparable legislative initiatives, with Oklahoma recently passing a bill to invest state funds into Bitcoin. Nationally, there is support for Bitcoin reserves in federal financial policy from figures such as President-elect Donald Trump and Senator Cynthia Lummis.

Supporters of Kentucky’s Bitcoin Rights law view it as a safeguard against overregulation and an incentive to promote innovation within the state’s developing blockchain sector. However, opponents argue that investments in digital currencies are risky due to their volatility and the uncertainty of federal regulation. Despite the dissent, Kentucky’s move is part of a broader trend towards greater Bitcoin use and protection within state financial markets.

The legislative process in Kentucky requires authorization from both legislative houses before a bill reaches the governor’s desk. HB 701 successfully became law, while HB 376 is still in its initial stages of examination and 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 positioned itself at the forefront of Bitcoin rights, securing the right of individuals and corporations to do business in the cryptocurrency space without undue restrictions. While the future of HB 376 remains uncertain, the state can further solidify its position with the increasing rate of digital assets adoption in the United States.