Kentucky Gov. Andy Beashear signed House Bill 701. This bill offers better protection for Bitcoin users and crypto-currency holders who keep their own cryptocurrency.
A user who has self-custody of Bitcoin or other cryptocurrency is the one in control of his private key, which is required to approve transactions. It's more like having cash in a wallet than using a debit card to authorize your bank to send someone money.
Users that prefer this freedom are also responsible for their own holdings. A man in Wales has spent 12 years trying to get permission to excavate a landfill to retrieve a hard drive containing 8,000 Bitcoin worth $696 million at today's price.
But if that's the risk users are willing to take, the state of Kentucky wants to protect their rights.
The new law was unanimously supported by 91-0 votes in the House on February 28th and then again with 37-0 in the Senate, on March 13, before it was approved by Governor.
Individuals will be able to store and manage cryptocurrency in self-hosted wallets. The Kentucky residents should be able to gain complete control of their cryptocurrency without interference.
This means that local governments cannot enact laws discriminating against crypto mining.
It also makes it clear that mining rewards and stakes are not classified as securities. And operating blockchain nodes and staking will be exempt from Kentucky's money transmitter regulations.
Kentucky has also reviewed House Bill 376, which would create a cryptocurrency reserve in the state. The bill would permit the state to invest up to 10 percent of its excess reserves in digital assets that have a value of at least $750 billion.
Bitcoins to be used by other states
Kentucky’s new law follows a number of other states that are embracing cryptocurrency more.
An additional 19 states are currently examining legislation to allow cryptographic funds for use in public funding.
Notably Utah passed a bill, on January 28, that will authorize the state treasurer to allocate up to 5% of certain public funds to "qualifying digital assets." It is only applicable if they are able to meet the primary requirement that their market capitalization averages over $500 billion over the previous 12 months.
New Mexico, another example. Bitcoin Support Senator Anthony L. Thornton’s introduction of the Strategic Bitcoin Reserve Act SB275 on 4 February, proposing an allocation of 5% public funds for Bitcoin.
The Bitcoin Reserve Monitor is actively tracking 16 states at the time this article was published.
It's worth noting that while there is interest here, most are capped at 10%, and there are still the majority of states that are not looking into crypto at this stage.
And some states—like Montana, North Dakota, Wyoming, and Pennsylvania—have already rejected the efforts to convert tax dollars into Bitcoin.
Stacy Elliott edited this article.
