The House of Representatives passed a measure Wednesday that positions Kentucky as an attractive location for future economic investment by companies engaged in the cryptocurrency mining. The bill, HB 230, would allow cryptocurrency businesses to qualify for exemptions – particularly the sales tax levied on electricity.
House Majority Floor Leader Steven Rudy of Paducah is the bill’s primary sponsor and Representative Chris Freeland of Benton serves as the primary cosponsor.
“Cryptocurrency is a new, interesting and highly sophisticated industry that’s getting a lot of international attention,” Rudy said. “Mining for cryptocurrency is highly technical and it is a highly sophisticated industry. Available jobs in this industry can be lucrative and increasing rapidly. As we look to building our economy, we have to be in the right position to welcome the jobs of tomorrow.”
Essentially, cryptocurrency is a digital currency that is exchanged between peers without the need of a third party. It enables consumers to digitally connect directly through a transparent process, showing the financial amount, but not the identities of the people conducting the transaction. The network consists of a chain of computers, which are all required to approve a cryptocurrency exchange and prevent duplication of the same transaction. Because of its transparency, this type of transaction has the potential to reduce fraud. The cryptocurrency procedure uses digital safeguards to ensure the security of transactions. In addition, each transaction must be confirmed in a digital public ledger, called a blockchain, through a process known as mining. Cryptocurrency exchange is somewhat similar to the online payment systems, PayPal and Venmo, except the currency being exchanged is not traditional money.
In 2019, Core Scientific, one of the largest block chain hosting providers in the United States, opened a facility in Calvert City. “The facility in Calvert City brought an industry with new innovation and jobs to my district,” Representative Chris Freeland R-Benton added. “As this industry continues to grow, this effort has great potential for our Commonwealth.”