Tennessee is moving forward with a bill that would allow its state reserves to include Bitcoin. Senate Bill SB 2639, sponsored by Senator Kerry Roberts, has cleared the Commerce and Labor Committee and now awaits detailed review by the Finance panel. Its House counterpart, HB 1695, was halted in the House Finance, Ways, and Means Subcommittee and cannot advance unless revived by leadership.
If enacted, the legislation would authorize the Tennessee State Treasurer to invest a portion of select state funds in Bitcoin. The rationale cites inflation eroding the purchasing power of assets held in reserves. Lawmakers describe Bitcoin as a decentralized digital commodity with a fixed supply and international liquidity, suitable for improving inflation-adjusted returns over the long term. Representative Jody Barrett, the House sponsor, compared Bitcoin to gold as an inflation hedge.
Investment Caps and Custody Details
The Treasurer could allocate up to 10% of eligible reserves — including the general fund — to Bitcoin. Annual investment is limited to 5% per fiscal year until the 10% cap is reached. If Bitcoin's market price pushes holdings above the cap, the state is not required to sell. Only Bitcoin is permitted; all other cryptocurrencies and digital assets are excluded.
The state may hold Bitcoin via direct custody, a qualified custodian, or a Bitcoin-only exchange-traded product. Security mandates encrypted offline hardware storage of private keys at two separate locations, with secure access requiring multiple approvals. A transparency provision requires the Treasurer to publish a public report every two years detailing holdings, acquisition cost, market value, and transaction summaries. A cryptographic proof system would allow independent on-chain balance verification, and security assessment summaries are available upon request.
The bill also permits Tennessee to accept Bitcoin for taxes, fees, or other obligations. Participation is voluntary, with Bitcoin received going into the general fund and agencies reimbursed in U.S. dollars at prevailing rates.
Wave of State-Level Bitcoin Policy Moves
Tennessee is not alone. South Dakota and Kansas have submitted bills proposing strategic reserves of Bitcoin or digital assets. Rhode Island and Florida have revived or introduced measures to study Bitcoin, facilitate adoption, or consider adding it to state portfolios under structured guidelines. These legislative efforts reflect growing interest among state governments in digital asset management and inflation hedging.