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Bill to let treasurer invest in Bitcoin draws prolonged questioning and is rejected by committee
Summary
HB1695 would authorize the state treasurer to invest certain reserve funds in Bitcoin (permissive, custody standards, cap at 10% of state budget); witnesses from the Tennessee Bitcoin Alliance testified but members expressed fiscal, custody, and bond-rating concerns and the bill received a negative recommendation.
Representative Barrett (speaker S16) introduced HB1695 to create a Tennessee Strategic Bitcoin Reserve by authorizing the state treasurer to invest certain reserve funds in Bitcoin as a diversification tool. Sponsor and witnesses from the Tennessee Bitcoin Alliance described the bill as permissive (not mandatory), capped at "10% of the state's budget," and requiring custody and custody-safeguard standards so the state would "maintain custody and control over the Bitcoin."
Witness Dave Birnbaum (speaker S11) and others answered a lengthy round of questions from committee members about risks including elder abuse tied to retail Bitcoin ATMs, custody and single-point-of-failure risks, quantum-computing threats, bond-rating concerns if the rainy-day fund were used, and how investment decisions and fiduciary safeguards would be implemented. Birnbaum said the bill is permissive and that many other jurisdictions are pursuing strategic Bitcoin reserves; he said Tennessee would be keeping pace with other states. Sponsor and witnesses emphasized custody standards and a cap on holdings; one witness said the bill "fetters" treasurer authority by setting maximums and custody rules.
After extended questioning and exchange, the committee voted and gave HB1695 a negative recommendation to Finance, Ways and Means (Clerk recorded 2 ayes and 10 nays). Members asked for stronger safeguards before the bill proceeds.
