TLDR
- Tennessee Senate Finance Committee will review SB 2639 on April 21 to consider creating a state Bitcoin reserve.
- The bill would allow the State Treasurer to invest up to 10% of certain public funds in Bitcoin.
- Annual Bitcoin purchases would be limited to 5% of each eligible fund until the cap is reached.
- The proposal restricts investments to Bitcoin and bars other digital assets.
- The bill sets strict custody standards and requires biennial public reporting with cryptographic proof of holdings.
Tennessee lawmakers will review a proposal to create a state Bitcoin reserve on April 21. The Senate Finance, Ways, and Means Committee will consider SB 2639 during its scheduled hearing. The bill would allow the State Treasurer to invest limited public funds in Bitcoin.
Lawmakers Advance Bitcoin Reserve Proposal to Finance Panel
Sen. Kerry Roberts sponsors SB 2639 and guides it through the Senate. The Senate Commerce and Labor Committee advanced the measure before sending it to Finance. The Finance panel oversees tax and spending matters, and it will now decide the bill’s next step.
Meanwhile, Rep. Jody Barrett sponsors the House companion, HB 1695. The House Finance, Ways, and Means Subcommittee placed the bill behind the budget and later removed it from notice. That action halted progress in the House unless leadership revives the measure.
The proposal directs the State Treasurer to invest a capped share of certain state funds in Bitcoin. Lawmakers cite inflation as a key concern in the bill’s findings. They state that rising prices reduce the real value of assets held in the general fund and other pools.
The bill describes Bitcoin as a decentralized digital commodity with a fixed supply. It argues that a fiduciary investor may use such an asset to improve long-term, inflation-adjusted returns. Barrett said, “This is about responsible stewardship of public finances,” and he compared Bitcoin to gold.
Bill Sets 10% Cap and Strict Custody Standards for Bitcoin Reserve
The legislation would allow the Treasurer to allocate funds from the general fund and the revenue fluctuation reserve. Lawmakers could also approve other state funds for participation. The bill caps Bitcoin holdings at 10% of each eligible fund at purchase.
The proposal limits annual purchases to 5% per fiscal year until the 10% cap is reached. However, passive price gains could push holdings above the cap without requiring sales. The bill restricts investments to BTC and bars other digital assets.
The measure outlines custody requirements for any Bitcoin reserve. A secure custody solution must store private keys in encrypted hardware kept offline. The system must keep the hardware in at least two locations and require multi-party authorization.
The bill also mandates encrypted channels for any access to private keys. Every two years, the Treasurer must publish a public report on holdings. The report must list Bitcoin amounts, dollar values at purchase, and values at period end.
The report must also summarize transactions during the reporting period. It must include cryptographic proof that allows third parties to verify on-chain balances. Security assessment summaries would remain available upon request.
The proposal also allows the Treasurer to create a program to accept Bitcoin for taxes and fees. Participation would remain voluntary for payers. The state would transfer the received Bitcoin to the general fund and record it at market value.
