As used in KRS 369.130 to 369.139:

1. (1) "Blockchain" means data that is:

   1. (a) Shared across a peer-to-peer network to create a ledger of verified linked network participants using information among transactions or cryptography to: 1. Maintain the integrity of the ledger; or 2. Execute other functions; and
   2. (b) Distributed in a concurrent, automated update to network participants on the state of the ledger and any other functions;
2. (2)

3. (3) "Blockchain network" means a technical infrastructure that provides ledger and smart contract services to applications; "Blockchain protocol" means any executable software:

   1. (a) Deployed to a blockchain, including an additional standardized set of rules that: 1. Uses an existing blockchain as a base; 2. 3. Allows that data to be broadcast to nodes; and 4. Facilitates the transfer of data and electronic records; Is governed by a set of predefined rules which execute autonomously without human intervention and can be altered by a predetermined mechanism; and
4. (4)
5. (5)
6. (6)
7. (7)
8. (b) Composed of a source code that is publicly available and accessible, including a smart contract or any network of smart contracts; "Cryptocurrency" has the same meaning as in KRS 139.516; "Cryptography" means the practice of coding information to ensure only the person that a message was written for can read and process that information; "Digital asset" means:
9. (a) Virtual currency;
10. (b) Cryptocurrency; and
11. (c) Natively electronic assets, including stablecoins, fungible tokens, and nonfungible tokens; that confer economic, proprietary, or access rights or powers; "Hardware wallet" means a physical device that:
12. (a) Stores private keys offline;
13. (b) Provides a way to sign transactions and interact with the blockchain; and
14. (c) Allows the owner to retain independent control over the digital asset contained therein;
15. (8)

16. (9) "Natively electronic asset" means a purely digital asset that exists only on the blockchain network; "Node" means a computer which:

    1. (a) Uses software to: 1. Communicate with other devices or participants on a blockchain to maintain consensus and integrity of that blockchain; 2. Create and validate transaction blocks; or 3. Contain and update a copy of a blockchain; and
    2. (b) Does not exercise discretion over transactions initiated by the end users of the blockchain protocol;

17. (10) "Nonfungible token" means a digital asset on a blockchain that:

    1. (a) Has unique identification codes and metadata that are recorded;
    2. (b) Has been tokenized and cannot be replicated;
    3. (c)
    4. (d) Represents digital or physical items including artwork or real estate; Is used to certify ownership and authenticity; and
18. (11) "Private key" means the access to manage digital assets at a specific internet address and may be used for encryption and digital signature;

19. (12) "Self-hosted wallet" means a digital interface that can:

    1. (a) Secure and transfer digital assets; and
    2. (b) Allow its owner to retain independent control of the secured digital assets and private keys;
20. (13) "Smart contract" has the same meaning as in KRS 42.747;

21. (14) "Stablecoin" means a digital asset that is: Issued by a corporation;

    1. (a)
    2. (b) Backed by cash or high-quality liquid assets; and
    3. (c) Redeemable on demand by the holder at par for a fixed monetary value in equivalent United States dollars;

22. (15) "Staking" means using a node to commit digital assets to a blockchain network to:

    1. (a) Validate transactions;
    2. (b) Propose and attest to blocks contained in the blockchain; and
    3. (c) Secure the network;

23. (16)

    1. (a)
    2. (b) "Staking as a service" means the provision of technical staking services by a service provider on behalf of an individual or business that owns the digital assets being staked. "Staking as a service" includes the operation of nodes and the associated infrastructure necessary to facilitate participation in blockchain protocols’ consensus mechanisms;
24. (17) "Third-party wallet" means a wallet that is hosted and controlled by a party other than the owner which contains the private keys for the owner of digital assets; and

25. (18) "Wallet" means a digital interface or a physical device which holds digital assets or private keys, and may include a:

    1. (a) Hardware wallet;
    2. (b) Self-hosted wallet; and
    3. (c) Third-party wallet.

Effective: June 27, 2025

History: Created 2025 Ky. Acts ch. 50, sec. 1, effective June 27, 2025.