House Bill 1695, also known as the "Tennessee Strategic Bitcoin Reserve Act," amends Tennessee Code Annotated to allow the state treasurer to invest a limited portion of state funds in bitcoin. The bill establishes guidelines for such investments, including that the market value of bitcoin held in any state fund cannot exceed 10% of that fund's total assets at the time of purchase, and no more than 5% may be acquired in a single fiscal year until the cap is reached. The bill also mandates that bitcoin must be held either directly by the state through a secure custody solution, by a qualified custodian, or in the form of an exchange-traded product.

Additionally, the bill outlines the responsibilities of the state treasurer regarding the management and reporting of bitcoin investments. The treasurer is required to adopt written procedures for secure custody, ensure that any qualified custodian is properly regulated and insured, and publish biannual reports detailing the quantity and value of bitcoin holdings. The act also allows for the acceptance of bitcoin for state taxes and fees, with provisions for voluntary participation. The bill is set to take effect on July 1, 2026, and includes a severability clause to maintain the validity of other provisions if any part is found invalid.