On March 24, Governor Andy Beshear of Kentucky, a state famous for bourbons, officially signed House Bill 701 into law. The bill establishes one of the most comprehensive state-level legal structures backing the self-custody of Bitcoin and other digital assets.

According to the House Bill, individuals have the right to keep their Bitcoin and crypto holdings in self-custody wallets and will not be subjected to any interference from local government authorities. Self-custody is when individuals hold their own private keys, similar to holding physical cash.

House Bill 701 also defines important crypto terms such as blockchain, private keys, staking, smart contracts, and self-hosted wallets while guaranteeing that individuals can operate wallets and accept crypto payments without incurring additional taxes or discrimination. This guarantees that staking and mining will not be classified as securities and that running blockchain nodes will be exempt from Kentucky's money transmitter regulations​​.

HB 701 protects Kentuckians' right to self-custody of their digital assets. The state is also considering HB 376, which would permit up to 10% of excess reserves to be allocated to significant digital assets.

Though there has never been a law in the United States expressly preventing people from storing Bitcoin or other cryptocurrencies in self-custody wallets, the regulatory landscape regarding such activities was left up to interpretation. For instance, in May 2024, Arkansas passed new restrictions on cryptocurrency mining operations in response to community concerns about noise and environmental impact.

While this puts users in complete control, it also poses a risk — as evidenced by a Welsh man who lost track of a hard drive storing 8,000 BTC , valued at nearly $700 million today.