Kentucky issued the HB 701 Act this week, which established the “Bitcoin rights” and encouraged the use of cryptocurrency in the state. The legislation available on the official state legislative website aims to position the region as a preferred environment for cryptocurrency.
As reported by Cryptooticias, Governor Andy Beshear has published the HB 701 project. This was announced in mid-February by lawmakers Adam Bowling and TJ Roberts. Establish a clear legal framework Around Bitcoin and its applications specific to technology.
This regulation Protect your “Bitcoin rights”the term used in organizations such as the Satoshi Action Fund openly promotes more than 90 Bitcoin-related bills that have been discussed in US regional legislatures in recent months.
On Monday, the organisation led by Bitconnor enthusiast Dennis Porter praised Governor Besher for promulgating the “Bitcoin Rights Act,” highlighting the will of millions of Americans to use BTC and Cryptocurrencies as of May 7th (when the law came into effect). “We will be protected without discrimination.”
So, what are the “Bitcoin rights” currently enforced by the new Kentucky law? Cryptonotics has reviewed the law in detail to answer this unknown.
Generally, these “rights” are just that The clear benefits that all cryptocurrencies currently enjoy Kentucky is now free to use these digital assets for a variety of reasons and without fear of restrictions.
- Tax-free in cryptocurrency trading
One of the rights to Bitcoin, embodied in the law, relates to cryptocurrency trading They are not subject to taxes, withholdings or additional charges It was derived only from use as a payment method.
This means that, according to new Kentucky law, when someone pays for legal goods or services using Bitcoin or other cryptocurrencies, that particular transaction will not generate additional taxes just because of the fact that they used the digital assets as a form of payment. In other words, the act of using BTC as money to buy something It does not involve any financial or administrative penalties Only about choosing your payment method.
but, This does not exempt users from applicable tax obligations For operation with US fiat currency. This provision makes it clear that the use of BTC as a means of exchange is protected, but taxes on profits or income related to its value are protected. They will remain in effect in accordance with existing federal and state regulations.
The exemption seeks to encourage the use of digital assets in daily transactions, Eliminate economic barriers that could discourage adoption of the dollar.
- Bitcoin self-occustody protection
The other right to Bitcoin, engraved in Kentucky jurisprudence, is the autocustom of Bitcoin and cryptocurrency, an action that enables individuals. Keep your own digital assets without relying on intermediaries.
The measure is now protected after the promulgation of a law that enhances the autonomy of Kentucky cryptocurrency users.
By guaranteeing this right, The law recognizes the importance of personal freedom in Bitcoin management and other digital assets. It follows the principles of decentralization that characterize these technologies. This could attract residents and businesses who directly manage digital funds.
- Bitcoin Miner Regulation and Node Operators
The behavior of nodes in decentralized and distributed networks is currently protected by Kentucky law and the exercise of Bitcoin mining or other cryptocurrency. Operators are permitted Join protocols and transfer digital assetsreducing the legal risks associated with these activities without fear of this activity being considered a securities offer or sale.
HB 701 provides regulatory clarity for industries facing uncertainty in several states in the country. By protecting nodes and minor operators, Kentucky Promote the development of the necessary technical infrastructure For cryptocurrencies that could position the state as an innovation center in this sector.
Therefore, mining, which means validating transactions and securing networks, is supported by a defined legal framework.
On the other hand, the law is also covered Staking activitiesThis is a common practice in certain networks such as Ethereum, Cardano, and Solana, and involves blocking cryptocurrencies to support the network in exchange for rewards.
Additionally, it exempts liability to those who operate nodes or provide staking services through certain transactions.provided that their roles are limited to their validation.providing legal certainty to participants.
Kentucky as a pioneer in the adoption of cryptocurrency
Under these provisions, Kentucky will add to a growing group of states that are supporting cryptocurrencies and are legislating in total in favor of more than 70% of US jurisdictions. uu. , up until now.
HB 701 not only encourages use as a payment instrument; Protects actors involved in the infrastructure It’s at the root of these technologies.
The acceptance of digital assets such as BTC for daily transactions may encourage recruitment between merchants and consumers. Tax-free, clarity of node behavior and protection of digital mining, Eliminate obstacles to that growth.
The law comes when cryptocurrencies have gained the ground worldwide and there has been a fierce regulatory debate in the US. Kentucky chooses models that promote use without putting any additional loads. Differentiate from a state with a more focused position.
With that new law, this area of Central Ease. uu. Establish precedents that can affect other jurisdictions. Though the impact depends on how merchants, miners and users actually adopt these provisions.
For now, The law shows a step towards standardizing Bitcoin Other digital assets in the state’s daily life.
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