Tennessee — Bitcoin and virtual-currency law

• Jurisdiction: State of Tennessee (US)
• Date checked: 2026-10-09 (all statuses below were checked on this date unless another date is given)
• Regulator: Tennessee Department of Financial Institutions (TDFI); Attorney General Jonathan Skrmetti (defended the kiosk ban)
• Governor: Bill Lee (signed the 2026 kiosk ban)
• Legislature: 114th General Assembly (2025–2026) adjourned April 2026; bills not enacted are dead; next General Assembly January 2027.
• Saved primary sources: sources/states/tn/ (see sources/states/tn/INDEX.md)

At a glance

1. Money-transmitter licensing of virtual currency

• Public Chapter 115 of 2023 — Tennessee Money Transmission Modernization Act, replacing Title 45, Chapter 7; effective 2024-01-01 (TDFI memo from Nicole Chamblee to money transmitters, 2023-10-06, saved). [S2]
• CSBS: full MTMA, T.C.A. §§ 45-7-110 et seq. (CSBS citation), "Money Transmission Modernization Act," effective 2024-01-01; no virtual-currency title. [S4]
• Virtual currency guidance: TDFI's "Virtual Currency Guidance" page links a 2014-08-08 consumer advisory (Commissioner Greg Gonzales: virtual currencies are volatile, can be stolen, transactions are irreversible) — saved. A TDFI "Memo on Virtual Currency" dated 2015-12-16 appears in search results but could not be downloaded (certificate/404 errors). Its widely repeated conclusion — that virtual currency alone is not "money" under Tennessee's money-transmitter law — is unverified, and whether the 2024 MTMA changed TDFI's view is not known (gap). [S3]

2. Virtual-currency-specific statutes

3. Crypto ATM / kiosk law — the ban

Public Chapter No. 766 (2026) — HB 2505 by House Speaker Cameron Sexton and Reps. Reedy, Lamberth, Brock Martin, Todd; substituted for SB 2251 by Sen. Johnson. Saved in full. [S1][S5]

• New T.C.A. § 45-16-201 definitions: "virtual currency" (digital representation of value used as a medium of exchange, unit of account or store of value without legal-tender status); "virtual currency kiosk" (an electronic terminal acting as the operator's mechanical agent to exchange virtual currency for money, bank credit or other virtual currency — whether it connects to an exchange or draws on the operator's own coins); "virtual currency kiosk operator" includes anyone who operates or owns a kiosk in Tennessee or "knowingly permits the use or installation of a virtual currency kiosk on property owned, leased, or controlled by the person."
• § 45-16-202: "It is an offense for a virtual currency kiosk operator or other person to knowingly install or allow installation of, permit, place, or otherwise operate a virtual currency kiosk in this state." Violation: Class A misdemeanor.
• History: filed 2026-02-04; House passed 94-0 and Senate 32-0 on 2026-03-16; signed by Gov. Bill Lee 2026-04-23; effective 2026-07-01. [S1][S5]
• Court challenge: two crypto companies sued in federal court; the judge denied a preliminary injunction, finding the plaintiffs unlikely to succeed and that "the public interest in stopping fraud outweighs those business losses"; the ban took effect July 1 and the case continues. AG Skrmetti: "Cryptocurrency ATMs have become a popular tool for scammers to trick consumers into sending money they can't recover." Plaintiff names, court, judge and case number were not found (gap). [N1][N2]
• News described Tennessee as the second state to ban kiosks (after Indiana); a Tennessee Elder Justice Coalition representative estimated about $10 million lost at Tennessee kiosks in 2025 (another report says $15 million). [N3][N4]

4. Tax treatment

• Tennessee has no broad personal income tax (the Hall tax on interest and dividends was fully repealed for tax years after 2020) — general knowledge, not re-verified. No Department of Revenue guidance on Bitcoin was found (gap).

5. Notable enforcement

• The kiosk ban is enforced criminally (Class A misdemeanor). No prosecutions under it were found (gap).
• No TDFI crypto consent orders were located in this check (gap).

6. Pending and recently failed bills (114th General Assembly, ended April 2026)

7. Contested and fringe claims (flagged, not endorsed)

• Ban vs. regulate. Tennessee chose an outright criminal ban (the operator and the store owner who knowingly hosts a kiosk can be charged). The industry argues bans cut off legitimate access to Bitcoin and that limits and refunds would suffice; the court so far has sided with the state at the preliminary stage. [S1][N1] Policy and legal dispute; merits not decided.
• "Programmable money" / CBDC fears (HB 2039) — the bill's premise that banks or issuers will deny transactions over political views is speculative; it failed in subcommittee. [S9]
• Loss figures ($10–15 million in Tennessee in 2025) come from advocates and news reports citing FBI data. [N3][N4]

Sources

Saved full copies are in sources/states/tn/.

• [S1] Tennessee Secretary of State, Public Chapter No. 766 (2026), HB 2505 / SB 2251. https://publications.tnsosfiles.com/acts/114/pub/pc0766.pdf — retrieved 2026-10-09 — saved tn-2026-public-chapter-766-hb2505-sb2251-virtual-currency-kiosk-ban.pdf
• [S2] TDFI memo, "Money Transmission Modernization Act" (Nicole Chamblee), 2023-10-06. https://www.tn.gov/content/dam/tn/financialinstitutions/compliance/2023-compliance-documents/Money%20Transmission%20Modernization%20Act%20Memo%20(October%202023).pdf — saved tn-tdfi-mtma-memo-2023-10.pdf
• [S3] TDFI, "TDFI aims to arm citizens with information about virtual currency," press release 2014-08-08 (linked from the Virtual Currency Guidance page). https://www.tn.gov/content/dam/tn/financialinstitutions/new-docs/TDFI_VirtualCurrency.pdf — saved tn-tdfi-virtual-currency-consumer-guidance.pdf; page https://www.tn.gov/tdfi/mortgage-consumer-lending/money-transmitter/virtual-currency-guidance-.html
• [S4] CSBS, MTMA State Enactments (PDF dated 2026-10-08). https://www.csbs.org/sites/default/files/external-link-files/10.8.26%20MTMA%20State%20Enactments.pdf
• [S5] Tennessee General Assembly, HB 2505 bill information. https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HB2505&GA=114 — read 2026-10-09
• [S6] Tennessee General Assembly, SB 1859 bill information (Public Chapter 704). https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB1859&GA=114 — read 2026-10-09
• [S7] Tennessee General Assembly, HB 1695 bill information. https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HB1695&GA=114 — read 2026-10-09
• [S8] NCSL, 2024 and 2026 cryptocurrency legislation pages. https://www.ncsl.org/financial-services/cryptocurrency-digital-or-virtual-currency-and-digital-assets-2026-legislation — read 2026-10-09
• [S9] Tennessee General Assembly, HB 2039 bill information. https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HB2039&GA=114 — read 2026-10-09
• [N1] NewsChannel 5 Nashville, "Federal court allows Tennessee's crypto ATM ban to stand" (2026). https://www.newschannel5.com/news/tennessees-ban-on-cryptocurrency-atms-gets-federal-court-approval — summary only
• [N2] Nashville Post, "Federal court ruling green lights Tennessee's cryptocurrency ATM ban" (headline only). https://www.nashvillepost.com/politics/federal-court-ruling-green-lights-tennessee-s-cryptocurrency-atm-ban/
• [N3] Yahoo News, "Tennessee becomes second state to ban cryptocurrency ATMs; KPD says these scams…," 2026-06-15. https://www.yahoo.com/news/politics/articles/tennessee-becomes-second-state-ban-204613762.html — summary only
• [N4] Yahoo News, "TN ban on crypto ATMs takes effect July 1; Tennesseans lost $15M in 2025" (headline only). https://www.yahoo.com/news/us/articles/tn-ban-crypto-atms-takes-152523115.html