Michigan Crypto Reserve Bill Advances to Committee After Seven Month Pause
Michigan's House Bill 4087 advanced to a second reading Thursday after remaining inactive for seven months, marking progress toward establishing a strategic cryptocurrency reserve. According to Cointelegraph, the legislation moved to the Committee on Government Operations and would permit the state treasurer to invest up to 10% of funds from Michigan's countercyclical budget and economic stabilization fund in cryptocurrency.
Republican Representatives Bryan Posthumus and Ron Robinson introduced the bill in February 2025. The legislation amends the Michigan Management and Budget Act to establish guidelines for a strategic crypto reserve without mentioning Bitcoin specifically. The bill defines acceptable digital currency as one that uses encryption techniques to regulate unit generation and verify fund transfers while operating independently of a central bank.
The proposed law requires the state to hold crypto assets through three approved methods: a secure custody solution, a qualified custodian such as a bank or trust company, or exchange-traded products from registered investment companies. Technical security requirements include exclusive government control of private keys, end-to-end encryption, prohibition of smartphone access, geographically diversified secure data centers, multiparty transaction authorization, and regular security audits.
State Bitcoin Advocacy Group Opposes Broader Crypto Inclusion
The Michigan Bitcoin Trade Council has opposed House Bill 4087 due to the absence of market capitalization requirements that would restrict investments to Bitcoin only. The advocacy group argues that permitting other cryptocurrencies would create unnecessary risk, claiming all digital assets other than Bitcoin are centralized and subject to greater volatility.
Michigan's state pension fund already maintains exposure to Bitcoin and Ethereum exchange-traded funds, providing existing familiarity with digital asset management. CoinDesk reports the bill's progression comes amid growing momentum for sovereign Bitcoin adoption as a defining trend of 2025. Bitcoin prices have increased 25% this year, reaching record highs near $124,500 in August.
We previously reported that fifteen US states moved forward with plans for Bitcoin reserves, following President Trump's executive order to explore creating a national cryptocurrency stockpile. Pennsylvania led this initiative by introducing the first state-level Bitcoin reserve bill in November 2024, with the movement gaining momentum after Trump's election victory and continued support for making America "the crypto capital of the planet."
Industry Impact and Competitive Positioning Among States
Michigan now joins Massachusetts and Ohio with strategic crypto reserve bills reaching the committee stage, while only New Hampshire, Arizona, and Texas have enacted legislation enabling state treasurers to invest in Bitcoin and crypto assets. Chainalysis notes that sovereign Bitcoin reserves could have major supply-side impacts, with even modest accumulation by governments reducing circulating availability and contributing to supply constraints given Bitcoin's permanent cap of 21 million coins.
Strategic Bitcoin reserve bills have been rejected in Montana, North Dakota, South Dakota, Wyoming, and Pennsylvania, with 17 other states maintaining pending legislation. The competitive landscape reflects varying approaches to digital asset adoption, with some states like New Hampshire implementing conservative 5% allocation limits while others propose more substantial 10% thresholds.
Government participation in Bitcoin markets could signal the asset has entered a more mature phase, potentially decreasing volatility through institutional-grade custody solutions and greater integration into regulated financial infrastructure. Financial analysts suggest that sustained government demand from multiple states could drive long-term price appreciation, though critics cite Bitcoin's price volatility as a risk for public funds. The legislation still requires additional committee approval and full legislative passage before Michigan could begin cryptocurrency purchases for its state treasury operations.
