The Banking & Consumer Affairs Subcommittee of the Tennessee State Legislature convened on February 19, 2025, to discuss various topics related to the financial landscape, with a particular focus on cryptocurrency and its implications for community banks and credit unions.

The meeting began with a request for insights into the department's approach to cryptocurrency, often referred to as "interweb money." A committee member expressed concerns about the risks associated with digital currencies and sought clarification on how the department is monitoring these developments. The member emphasized the need for understanding the opportunities and challenges posed by cryptocurrency.

In response, a representative from the department acknowledged the importance of the topic and echoed the concerns regarding the decline in the number of community banks. The representative noted that while there had been some discussions with banks and credit unions about cryptocurrency in the past few years, no significant initiatives had emerged from those conversations.

The representative clarified that the department does not regulate cryptocurrency itself but oversees money transmitters that facilitate the exchange of crypto for fiat currency or other cryptocurrencies. They emphasized the department's role in understanding the financial impact of these activities on the institutions involved, rather than direct supervision of cryptocurrency transactions.

The discussion highlighted the growing interface between traditional banking institutions and the cryptocurrency asset class, suggesting that this relationship is likely to evolve further in the future. The representative concluded by acknowledging the importance of staying informed about the developments in this area as the financial landscape continues to change.

Overall, the meeting underscored the need for ongoing dialogue and adaptation within the banking sector as it navigates the complexities introduced by cryptocurrency and digital finance.