House Bill 1695, known as the "Tennessee Strategic Bitcoin Reserve Act," amends Tennessee Code Annotated to allow the state treasurer to invest a limited portion of eligible state funds in bitcoin. The bill establishes guidelines for such investments, including a cap of 10% of a fund's total assets for bitcoin holdings, with a maximum of 5% to be acquired in any single fiscal year until the cap is reached. The bill also mandates that bitcoin must be held through secure custody solutions or qualified custodians, ensuring robust security measures are in place for the state's digital assets.

Additionally, the bill requires the state treasurer to adopt written procedures for secure custody, publish biennial reports on bitcoin holdings, and evaluate the performance of the bitcoin reserve by October 1, 2032. It also allows for a program to accept bitcoin as payment for state taxes and fees, with the stipulation that participation is voluntary. The act is set to take effect on July 1, 2026, and includes provisions for severability in case any part of the act is deemed invalid.