Nikolas Sargeant
Michigan has moved closer to establishing a strategic cryptocurrency reserve after House Bill 4087 advanced to its second reading on Thursday and was referred to the Committee on Government Operations. The legislation, introduced by Republican Representatives Bryan Posthumus and Ron Robinson in February, would authorize the state treasurer to allocate up to 10% of Michigan's countercyclical budget and economic stabilization fund into cryptocurrency investments.
The bill sets comprehensive security requirements for crypto custody, including exclusive government control of private keys, end-to-end encryption, geographically diversified data centers, and regular security audits. Unlike some state proposals that focus specifically on Bitcoin, Michigan's legislation broadly defines eligible digital assets as cryptocurrencies that use encryption techniques and operate independently of central banks, potentially opening the door to various crypto assets beyond Bitcoin.
However, the broad language has drawn opposition from the Michigan Bitcoin Trade Council, which argues that including cryptocurrencies other than Bitcoin creates unnecessary risk due to their centralized nature. The advocacy group contends that only Bitcoin should qualify for strategic reserves, citing concerns about the volatility and governance structures of alternative cryptocurrencies.
Other States Are Farther Ahead
Michigan now joins Massachusetts and Ohio as states with crypto reserve bills that have reached the committee stage, while only New Hampshire, Arizona, and Texas have successfully enacted similar legislation. With 17 other states currently considering crypto reserve proposals and several others having rejected such measures, Michigan's bill represents part of a broader national trend toward state-level cryptocurrency adoption, though the path to final passage remains uncertain.
