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The Tennessee legislature, known as the General Assembly, has introduced a bill that could change how the state manages its money. This document, proposed by Jody Barrett of the House of Representatives and called the Tennessee Strategic Bitcoin Reserve Act, suggests looking at reserves in a new way. The main idea is to enable the authorities to invest some of the money from key funds in bitcoin.  

The reason for this unusual step is the decline in the purchasing power of ordinary money. The bill explicitly states that inflation "eats up" the real value of assets accumulated in the main budget and the reserve fund. An alternative is bitcoin, which is described as a digital currency with a known maximum number of coins in advance, and which is easy to sell and buy around the world. Lawmakers believe that if it is wise to add bitcoin to the portfolio, it can help increase investment returns adjusted for inflation in the long run.  

The bill pays special attention to how bitcoins will be stored and protected. It is assumed that the access keys to the reserves will be stored on special encrypted devices. These devices must be stored separately, in at least two different locations.  

To access the reserves, you will need to use secure communication channels and multi-stage authorization. It will be necessary to keep detailed records of all operations, as well as conduct independent code reviews and cybersecurity tests every year. Companies that will store bitcoins will need to have contingency plans in place to quickly restore the system.  

In addition, the bill considers the possibility for the state to accept bitcoin as payment for taxes and other government payments. But paying with bitcoin will be a voluntary matter.  

In general, the bill offers a balanced approach to how to add a new type of asset to the conservative system of public finances. It combines the potential benefits of owning bitcoin as protection against inflation with strict security rules and full transparency.