Michigan has introduced a new bill aimed at creating a state-backed cryptocurrency reserve, positioning it as the 20th U.S. state to explore this innovative financial strategy. House Bill 4087, introduced on February 13 by Representatives Bryan Posthumus and Ron Robinson, would allow Michigan to invest up to 10% of its general fund and economic stabilization fund in cryptocurrency.
Under the proposed legislation, the state treasurer would oversee and directly manage any cryptocurrency holdings, utilizing secure custody solutions, qualified custodians, or exchange-traded products from regulated investment firms to ensure safe and compliant management of assets.
The bill also opens the door for crypto lending, with provisions allowing the state to lend out its digital currency to generate additional returns—provided such actions do not increase financial risks to the state.
Moreover, any taxes or fees paid to Michigan in cryptocurrency would be directed to the state’s general fund. If those payments were intended for other funds, the treasurer would be required to reimburse the original fund in fiat currency equivalent to the cryptocurrency received.
Michigan’s move follows similar efforts in other states, with 19 others currently considering bills for a cryptocurrency-backed strategic reserve, each at varying stages of progress. Michigan joins a growing number of states taking steps to incorporate digital currencies into their financial strategies.
Rep. Posthumus has expressed his belief that Michigan should “join Texas in leading on crypto policy,” referencing a bill introduced by Texas Senator Charles Schwertner just the day before. Both states are positioning themselves as crypto-friendly, with Texas seen as a possible leader in this space due to its dedicated digital asset task force and 45-day legislative timeline.
Michigan has already taken steps toward crypto investments, such as its $10 million stake in Grayscale’s Ethereum ETF and its earlier $6.6 million investment in ARK 21Shares’ Bitcoin ETF, solidifying the state’s interest in digital assets.
As the legislative process moves forward, Michigan’s bill could play a significant role in the growing trend of states integrating cryptocurrency into their financial systems.
