Kentucky Senate Passes Bill Protecting Bitcoin Self-Custody Rights

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The Kentucky Senate made a significant move yesterday evening by unanimously passing a bill that focuses on safeguarding Bitcoin self-custody rights and digital asset mining operations. The legislation, known as AN ACT relating to blockchain digital assets (HB 701), has now advanced to the Governor’s desk for final approval.

Spearheaded by Representatives Adam Bowling and T.J. Roberts, the bill emphasizes the importance of individuals being able to self-custody digital assets using self-hosted wallets. It also addresses the issue of discriminatory zoning laws that could negatively impact digital asset mining businesses, ensuring that Bitcoin miners can conduct their operations without unnecessary restrictions within the state.

Key provisions outlined in the bill include:

– Protection for Bitcoin self-custody: Individuals are granted the legal right to utilize and store digital assets in self-hosted wallets.
– Prohibition of discriminatory zoning laws: Local governments are prohibited from implementing zoning changes that unfairly target digital asset mining businesses.
– Exemptions from money transmitter licensing: Home Bitcoin miners and digital asset mining businesses are exempt from Kentucky’s money transmitter requirements.
– Clarification of securities laws: Digital asset mining and staking as a service are explicitly not classified as securities under Kentucky law.

The bill initially passed through the Kentucky House with a resounding 91-0 vote on February 28, 2025, before making its way through the Senate. The March 13 vote saw unanimous bipartisan support, with 37 senators voting in favor, none opposed, and one not voting.

Once the Governor signs the legislation, it will officially solidify Bitcoin self-custody protections and digital asset mining rights into Kentucky law. This move would position Kentucky as one of the more Bitcoin-friendly states in the nation, potentially setting a precedent for other states to consider similar measures in the future.