Michigan Pushes Forward with Groundbreaking State-Owned Crypto Reserve Bill in 2025
- What Does Michigan's Crypto Reserve Bill Propose?
- How Would Michigan Secure Its Crypto Holdings?
- Why Is the Michigan Bitcoin Council Opposing the Bill?
- How Does Michigan's Approach Compare to Other States?
- What Are the Potential Impacts of This Legislation?
- Frequently Asked Questions
Michigan is making waves in the financial world as it accelerates efforts to establish a state-owned cryptocurrency reserve. House Bill 4087, which recently advanced to its second reading after months of legislative stagnation, could allow the Great Lakes State to allocate up to 10% of its stabilization fund into digital assets. This move comes as several U.S. states diverge on cryptocurrency adoption strategies, with Michigan joining Massachusetts and Ohio as frontrunners in the strategic crypto reserve movement.
What Does Michigan's Crypto Reserve Bill Propose?
The revised House Bill 4087, sponsored by Republican representatives Bryan Posthumus and Ron Robinson in February 2025, seeks to amend Michigan's Budget and Management Act to create clear guidelines for state-level cryptocurrency holdings. The legislation would authorize the state treasurer to invest up to 10% of Michigan's countercyclical budget and economic stabilization fund in digital assets - not limited to just Bitcoin. According to CoinMarketCap data, with bitcoin currently trading around $116,871, some market observers caution this might represent a potential buying peak.
How Would Michigan Secure Its Crypto Holdings?
The bill outlines rigorous security protocols for any state-held digital assets. These include:
- Exclusive government control of private keys
- Full encryption of all stored assets
- Smartphone-restricted access
- Multi-location secure storage
- Multi-party transaction authorization
- Routine security audits
Why Is the Michigan Bitcoin Council Opposing the Bill?
In a surprising twist, the Michigan Bitcoin Trade Council has come out against HB 4087, arguing it creates "unnecessary risk" by not limiting investments to Bitcoin alone. The advocacy group maintains Bitcoin is the ONLY stable cryptocurrency and sole prudent digital asset for state investment, citing centralization risks with other coins. "That's why we don't support House Bill 4087 and encourage people to contact legislators to oppose the legislation," stated the Council in their official position.
How Does Michigan's Approach Compare to Other States?
Michigan now joins Massachusetts and Ohio as the only states with strategic crypto reserve bills reaching committee stages. New Hampshire, Arizona and Texas have also joined the growing list of states exploring Bitcoin and digital assets as financial hedges. Meanwhile, Montana, Wyoming, Pennsylvania and the Dakotas have rejected similar proposals. Bitcoin Reserve Monitor shows 17 other states still have pending status regarding such legislation.
This movement coincides with recent U.S. House progress on an appropriations bill directing the Treasury Department to examine creating a federal Bitcoin Strategic Reserve, focusing specifically on governance, security, custody, and economic stability aspects.
What Are the Potential Impacts of This Legislation?
If passed, Michigan's bill could set important precedents for state-level cryptocurrency adoption. The ability to lend crypto holdings for yield generation (without increasing financial risk) presents interesting possibilities for state revenue streams. However, the debate over Bitcoin-exclusive versus diversified crypto reserves highlights ongoing tensions within the digital asset community about what constitutes "prudent" public sector investment in this volatile space.
This article does not constitute investment advice. As always with emerging financial technologies, the devil will be in the implementation details - from custody solutions to audit protocols. But one thing's clear: the race to establish state crypto reserves is heating up in 2025, and Michigan just moved several spaces ahead on the board.
Frequently Asked Questions
What percentage of Michigan's funds could be invested in crypto under HB 4087?
The bill allows for up to 10% of Michigan's countercyclical budget and economic stabilization fund to be invested in cryptocurrency assets.
Which cryptocurrencies would Michigan be allowed to hold?
Unlike some other state proposals, HB 4087 doesn't limit investments to just Bitcoin - it allows for any digital assets that meet the bill's custody and security requirements.
How would Michigan's crypto holdings be secured?
The bill mandates strict security protocols including government-controlled private keys, full encryption, multi-party authorization for transactions, and routine security audits conducted by qualified professionals.
Why are some groups opposing this legislation?
The Michigan Bitcoin Trade Council opposes the bill because it doesn't restrict investments to Bitcoin alone, which they view as the only sufficiently decentralized and stable cryptocurrency appropriate for state investment.
How does Michigan's approach compare to other states?
Michigan joins Massachusetts and Ohio as leaders in state-level crypto reserve legislation, while about 17 other states are still considering similar measures and several have rejected such proposals entirely.
