Michigan Pushes Forward State-Owned Crypto Reserve Bill: What You Need to Know (2025 Update)
- What Does House Bill 4087 Propose?
- Why Is the Bitcoin Council Opposed?
- How Does Michigan’s Approach Compare?
- What Are the Security Measures?
- When Could This Become Law?
- Your Questions Answered
In a bold move that could reshape its financial strategy, Michigan is accelerating efforts to establish a state-owned cryptocurrency reserve. House Bill 4087, now in its second reading after months of legislative gridlock, would allow the Great Lakes State to allocate up to 10% of its stabilization fund into digital assets. While supporters hail it as a progressive step, the Michigan Bitcoin Council has raised surprising objections. Here’s the full breakdown of this developing story.
What Does House Bill 4087 Propose?
Michigan lawmakers advanced HB 4087 to the Government Operations Committee on Thursday, marking its first significant progress since February. The revised bill aims to amend the Michigan Management and Budget Act, creating clear guidelines for a state crypto reserve. Key provisions include:
- Authorization to invest up to 10% of the Countercyclical Budget and Economic Stabilization Fund in cryptocurrencies (not limited to Bitcoin)
- Three approved custody methods: secure custody solutions, qualified depositories (banks/trust companies), or registered investment company ETFs
- Permission to lend crypto holdings for yield generation, provided it doesn’t increase financial risk
- Stringent security protocols including multi-party transaction approvals, encrypted private key storage, and regular audits
Republican Representatives Bryan Posthumus and RON Robinson, the bill’s sponsors, argue this positions Michigan at the forefront of state-level digital asset adoption. "This isn’t about speculation—it’s about diversification," Posthumus stated during committee hearings.
Why Is the Bitcoin Council Opposed?
In an unexpected twist, the Michigan bitcoin Trade Council has come out against the legislation. Their primary objection? The bill doesn’t restrict investments to Bitcoin alone. "Including altcoins introduces unnecessary risk," argued council spokesperson David Keller. "Bitcoin remains the only decentralized, battle-tested cryptoasset suitable for state reserves."
The council has launched a campaign urging citizens to contact legislators, though their stance appears isolated. Market analysts note the irony—while Bitcoin trades near $116,871 (per CoinMarketCap data), some fear Michigan might be buying at a potential peak.
How Does Michigan’s Approach Compare?
Michigan joins Massachusetts and Ohio as the only states with active crypto reserve bills in committee. The landscape varies wildly:
| State | Status | Key Differentiator |
|---|---|---|
| New Hampshire | Exploratory phase | Focuses exclusively on Bitcoin |
| Texas | Passed study mandate | Includes blockchain infrastructure development |
| Montana | Rejected | Cited volatility concerns |
Meanwhile, the U.S. House recently passed an appropriations bill directing the Treasury to explore a federal Bitcoin reserve—a sign of growing institutional interest.
What Are the Security Measures?
The bill mandates military-grade protections for state-held crypto:
- Geographically distributed cold storage
- Multi-signature wallets requiring 3/5 approvals
- Biometric access controls
- Quarterly penetration testing
"We’ve learned from incidents like the FTX collapse," noted State Treasurer Rachel Eubanks. "Our framework exceeds private sector standards."
When Could This Become Law?
With bipartisan support, HB 4087 could reach the governor’s desk by Q4 2025. However, amendments are likely—particularly regarding altcoin inclusion. BTCC market analyst Liam Chen suggests: "Michigan might compromise by capping non-Bitcoin allocations at 2-3% initially."
Your Questions Answered
Why is Michigan pursuing this now?
With 17 states considering similar measures, Michigan risks falling behind in attracting crypto-native businesses. The timing aligns with renewed federal discussions about digital asset regulation.
How would this affect taxpayers?
Proponents claim diversification could stabilize budgets during economic downturns. Critics warn of potential losses—though the 10% cap limits exposure.
Could other assets like NFTs be included?
Not under current language. The bill specifically excludes collectibles and non-fungible tokens.
