Tennessee proposes allocating 10% of state funds to bitcoin as Senate hearing set for April 21

Tennessee’s “Strategic Bitcoin Reserve Act” (SB 2639) will be heard by the Senate Finance, Revenue and Appropriations Committee on April 21 (next Tuesday). The bill was introduced by Senator Kelly Roberts, has passed the Senate Business and Labor Committee, and now moves to the Finance Committee responsible for overseeing tax and spending measures. If it passes, the Tennessee State Treasurer may allocate up to 10% of eligible state funds to bitcoin (BTC).

Key Provisions of the Bill: Investment Cap, Annual Cadence, and Custody Standards

The bill sets out a complete compliance framework for a bitcoin allocation:

Summary of Key Provisions

Investment cap: No single investment may exceed 10% of the total eligible funds

Annual purchase limit: No more than 5% per fiscal year until reaching the cap

Passive appreciation exemption: When holdings increase due to market gains beyond the cap, there is no need for forced selling

Asset restrictions: Only bitcoin (BTC); investment in other cryptocurrencies or digital assets is explicitly prohibited

Custody methods: Hold directly, through an eligible custodian, or through a bitcoin-linked exchange-traded product (ETP)

Security standards: Private keys must be stored offline in cryptographic hardware located in at least two different locations; access must use encrypted channels and multi-party authorization

Transparency is also a core part of the bill’s design: the State Treasurer must publish a public report every two years, including the number of holdings, their USD value, trade summaries, and cryptographic proofs of on-chain balances encrypted in a way that allows independent third-party verification.

State-by-State Bitcoin Reserve Legislative Wave: Tennessee Joins the Race

The bill defines bitcoin as a “decentralized digital commodity with a fixed supply and global liquidity,” with the central legislative rationale being that inflation erodes the real purchasing power of state fiscal funds. Representative Jody Barrett, in a statement, likened bitcoin to gold and said it can serve as a tool to hedge against inflation.

Tennessee’s move is part of a broader wave of U.S. states exploring public-finance bitcoin policies. South Dakota, Kansas, Rhode Island, Florida, and others have already proposed or are pushing forward similar legislation that allows public funds to be allocated to bitcoin or digital-asset reserves.

Also in the News: Charles Schwab Opens Spot BTC and ETH Trading for Retail Traders

At the same time, Charles Schwab announced that its crypto platform, Schwab Crypto, will soon offer retail investors spot trading services for bitcoin (BTC) and ether (ETH). This further lowers the barrier for individual investors to participate in the spot crypto market, reflecting the ongoing increase in acceptance of crypto assets by mainstream financial institutions.

Frequently Asked Questions

Which stage of the legislative process is Tennessee’s Bitcoin reserve bill currently in?

Senate bill SB 2639 has passed the Business and Labor Committee and will be heard by the Finance Committee on April 21. The corresponding House bill, HB 1695, was withdrawn this week and is currently stalled, resulting in a clear divergence in progress between the two chambers. Whether the bill can pass both chambers within the current legislative session remains uncertain.

How does the bill define bitcoin custody safety standards?

The bill requires that a “secure custody solution” store private keys in cryptographic hardware in at least two different locations, using fully offline storage. Access to private keys must be carried out through encrypted channels and with multi-party authorization. The State Treasurer may choose from three methods: holding directly, using an eligible custodian, or using a bitcoin-linked ETP.

Why does the bill allow investment only in bitcoin rather than other crypto assets?

The bill explicitly defines bitcoin as a unique “decentralized digital commodity,” emphasizing its fixed supply (21 million coins) and global liquidity and arguing that these characteristics provide a basis for compliant entrusted investment. Limiting investments to bitcoin also reduces complexity at the regulatory and legal levels, creating a separation from controversies over the legal characteristics of other cryptocurrencies.