Tennessee Cryptocurrency Laws

Relevant Statute

Tennessee Money Transmitter Act of 1994 45-7-201

“Money Transmitter” Definition

“”Money transmission”” means the sale or issuance of payment instruments or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad by any and all means, including, but not limited to, payment instrument, wire, facsimile or electronic transfer. 45-7-203

Additional Definitions

“”Payment instrument”” means any check, draft, money order, travelers check or other instrument or written order for the transmission or payment of money, sold or issued to one (1) or more persons, whether or not the instrument is negotiable. “Payment instrument” does not include any credit card voucher, any letter of credit or any instrument that is redeemable by the issuer in goods or services. 45-7-203


This part does not apply to: (1) The United States or any department or agency of the United States; (2) The state of Tennessee or any political subdivision of the state; (3) Banks, trust companies, credit unions, building and loan associations, savings and loan associations, savings banks or mutual banks organized under the laws of any state or the United States; and (4) Transactions governed by title 56, or the rules and regulations promulgated solely under title 56. 45-7-204

Registration Fees

$250 License/Registration Fee

Bond and Insurance Requirements

Each application must be accompanied by a surety bond, irrevocable letter of credit or other similar security device, referred to as “security device” in this section, acceptable to the commissioner in the amount of fifty thousand dollars ($50,000). If the applicant proposes to engage in business under this part at more than one (1) location, through authorized agents or otherwise, then the amount of the security device will be increased by ten thousand dollars ($10,000) per additional location, up to a maximum of eight hundred thousand dollars ($800,000). The security device shall be in a form satisfactory to the commissioner and shall run to the state of Tennessee for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission, and payment of money in connection with the sale and issuance of payment instruments and/or transmission of money. In the case of a bond, the aggregate liability of the surety in no event shall exceed the principal sum of the bond. Surety bonds shall be obtained for a term of not less than one (1) year and evidence of the renewal of the surety bond shall be provided to the commissioner not less than thirty (30) days before the bond expiration date. Claimants against the licensee or its authorized agents may themselves bring suit directly on the security device, or the commissioner may bring suit on behalf of the claimants, either in one (1) action or in successive actions. In the case of an irrevocable letter of credit, licensees shall obtain letters of credit for terms of not less than three (3) years and renew the letters of credit annually. 45-7-208

Capital Requirements

(a) Each applicant for a license must demonstrate, and each licensee must maintain a net worth of not less than one hundred thousand dollars ($100,000) computed according to generally accepted accounting principles. Persons transmitting or proposing to transmit money shall have an additional net worth of twenty-five thousand dollars ($25,000) per additional location or agent located in Tennessee, as applicable, to a maximum of five hundred thousand dollars ($500,000). 45-7-205

State Comments or Statements

Released a memo in 2015 saying that receiving virtual currency in exchange for a promise to make it available at a later time or different location is not money transmission. Absent involvement of a soveriegn currency in a transaction, no money transmission can occur. https://www.tn.gov/content/dam/tn/financialinstitutions/new-docs/TDFI%20Memo%20on%20Virtual%20Currency.pdf