Authored by Tennessee Representative Michael Curcio, a newly proposed bill, HB2093, would modify the state's code to effectively prohibit trustees from using cryptocurrencies as investment vehicles in state government retirement trusts.
The modification would be recorded in Title 8, Chapter 27 of the Tennessee State Code, which deals with retirement benefits set aside for government employees. As the system currently stands, contributions are held in a trust fund, "to be paid as they come due," when each employee retires. In 8-27-802, the code allows that "the trust or trusts may invest in any security or investment in which the Tennessee consolidated retirement system is permitted to invest."
Curcio's newly-proposed amendment would mean that Tennessee's public employee retirement system would be prohibited from speculating on cryptocurrencies with public funds.
The bill's language is very clear, addressing the existing language in Tennessee Code Annotated, Section 8-27-805, which currently allows the state's trustees, as the custodians of the pension fund, "to invest any funds of the trust in any instrument, obligation, security, or property that constitutes legal investments." Under the amendment, an additional "subsection (b)" would be added, directing trustees as follows:
"(b) Notwithstanding any law to the contrary, the trustees shall not invest in any cryptocurrency."
The bill's language may imply a mistrust of volatile cryptocurrency-related investment vehicles, but its inclusion validates cryptocurrencies as a state-recognized "legal investment" – just one that, if the bill is enacted, employee funds will not engage with anytime soon.
Also awaiting legislative approval in Tennessee is HB1507, filed on January 10, 2018, which echoes bills introduced in Florida (HB1357) and Nebraska (LB691): all the filings relate to executable distributed code contracts (EDCCs), or smart contracts.
HB1507 would make it so that signatures secured through blockchain technology would carry the same weight as an electronic signature. According to the bill, the same can be said of contracts recorded with blockchain technology. In addition, the fact that a contract exists in the form of an EDCC may not be the sole basis to determine its legal enforceability – essentially lending credence to EDCCs and blockchain technology by incorporating them into state code, even though said code would seek other sources of validation to contracts besides the EDCC alone.
As written, the bills represent differences between the methods used by lawmakers to regulate cryptocurrencies, versus the overtures made to blockchains, suggesting that while they may be averse to the volatility in marketplaces, politicians still see value in the concept of blockchain technology as a whole.