Tennessee lawmaker introduces bill which would allow state to invest in crypto

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Jason Powell, a member of the Tennessee House of Representatives, has introduced a bill proposing counties, municipalities, and the state to invest in cryptocurrencies and nonfungible tokens, or NFTs.

According to Tennessee House Bill 2644 introduced on Feb. 2, Powell proposed amending the current state code to add crypto, blockchain, and NFTs to the list of authorized investments for the counties, state, and municipalities to make with idle funds. Lawmakers assigned the bill to the House Finance, Ways, and Means Subcommittee on Feb. 8 for further consideration.

“I want to see if my state and my city — I represent Nashville — can be a leader when it comes to blockchain technology," Powell told Cointelegraph. "I think it’s important to promote legislation that creates a pro-blockchain environment.”

The legislation was the second related to crypto and blockchain introduced by Powell. The same day, he asked Tennessee lawmakers to consider forming a study committee aimed at making the state “the most forward thinking and pro-business state for cryptocurrency and blockchain and to foster a positive economic environment for blockchain and cryptocurrency.” Tennessee House Bill 2643, should it be passed by the legislature, would appoint the state’s commissioner of commerce and insurance, currently Carter Lawrence, to chair the committee with members including a representative with “experience or knowledge in cryptocurrency” and another with knowledge of federal securities laws.

Among the proposed study committee’s duties would be to review data on crypto and blockchain across the United States, determine the status of laws applicable to the crypto space, study NFT use cases and regulations, open a dialogue with industry experts, and present recommendations on potential legislation to promote Tennessee as a blockchain and crypto hub. The group’s first report would be due by Dec. 31, 2022, with the law expected to take effect by July 1 if approved by lawmakers.

Powell also proposed a caption bill which would direct the Tennessee Advisory Commission on Intergovernmental Relations to conduct a similar study on crypto and blockchain laws across U.S. states and hinted at legislation which would strengthen the state's campaign finance laws to include developments in the crypto space like nonfungible tokens. In 2018, he introduced a bill which recognized the use of smart contracts in the state.

"This is an issue that I’ve been interested in working on for the last four years," said Powell. "I think that we’ve come a long way, and [want to] make sure that Tennessee stays ahead of the curve."

Because of the 10th amendment of the U.S. Constitution, lawmakers in states and at the federal level often cross paths to determine which body governs certain aspects of business and trade. The result is what many industry experts have described as a patchwork of legislation which crypto firms must navigate to legally operate in the United States.

Powell said he personally didn't want to "wait for Washington D.C. to decide" how to address crypto and would work to make his state attractive to innovators:

"I think it’s really important to be out there and embracing blockchain, embracing new technology, promoting anything we can do with companies that are in the fintech space to want to be in Nashville, want to be in Tennessee.”

In 2021, many local and state officials jumped on the bandwagon to promote their areas as having crypto-friendly regulations or other incentives for the space. In December, Florida Governor Ron DeSantis proposed the state government allow businesses to pay fees with cryptocurrencies including Bitcoin (BTC), while a bill signed by Kentucky Governor Andy Beshear in March reduced the sales tax burden of crypto miners operating in the state.

This article was updated on Feb. 10 to include comments from Representative Jason Powell.