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A Nashville lawmaker wants to officially accept electronic cryptocurrencies such as Bitcoin for financial transactions in Tennessee.

Rep. Jason Powell, D-Nashville, introduced the bill that would recognize these types of currencies and smart contracts for electronic transactions.

The bill would also protect ownership rights of information secured by the same methods.

“We are not just competing with other states in the technology and the space, we’re competing with the world,” Powell said after a Jan. 24 presentation on blockchain technology. “In making sure that Tennessee has meaningful blockchain legislation, it is really important to say that Tennessee is supportive of this technology and we want to be a leader in this innovation.”

Jason Powell (Photo: File)

Cryptocurrencies work by using a digital blockchain — a replicated ledger of financial transactions spread across a vast network of computers, creating a decentralized currency.

In theory, the technology can also be used to securely store data and private records.

Bitcoin, the most popular of the electronic currencies, rose from relative obscurity when a surge of investors began buying it through online exchanges in early 2017.

The price of the currency soared from around $1,000 in early February to over $19,000 in mid-December, according to coindesk.com, which tracks the currencies.

But since its peak in mid-December, the price has plummeted to about $7,000 in almost two months, in part due to large thefts by hackers and uncertainty around the currency’s actual value. 

But despite market fluctuations and speculators, Powell has said he believes the technology behind cryptocurrencies is more than a fad, and he wants to be sure Tennessee is on the forefront.

Powell said business exchanges using the technology is not illegal in Tennessee, but his measure would establish a law saying it’s acceptable.

Reporter Jordan Buie can be reached at 615-726-5970 or jbuie@tennessean.com. Follow him on Twitter @jordanbuie.

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