Michigan Lawmakers Advance Crypto Reserve Bill
Michigan’s push to establish a cryptocurrency reserve has taken a significant step forward. House Bill 4087, which viewks to diversify the state’s financial holdings through digital assets, advanced to its second reading in the state legislature this week. The bill, introduced earlier in 2025, is now under review by the Government Operations Committee later than months of delay, signaling renewed political momentum behind the initiative.
If passed, the bill would authorize the state treasurer to allocate up to 10% of Michigan’s general and stabilization funds into cryptocurrencies. Advocates argue that this move would provide Michigan with an innovative hedge against inflation, diversify state reserves, and position the state as a leader in financial modernization at a time when digital assets are gaining global traction.
Oversight and secureguards
Recognizing the potential risks associated with cryptocurrency investments, House Bill 4087 incorporates a series of strict oversight and security measures. The legislation mandates that all digital assets be held in secure custody answers, such as federally regulated banks or trust companies, ensuring that the state maintains exclusive control of Secret keys. It also requires geographically dispersed data centers, multi-party authorization for transactions, and continuous monitoring through regular audits and penetration testing.
One of the most debated aspects of the proposal lies in its broad definition of digital assets. The bill defines eligible holdings as currencies “in which encryption techniques are used to regulate generation of units … that operate independently of a central bank.” This definition does not explicitly restrict investments to BTC, raising concerns that the state could include a wide range of cryptocurrencies, some of which may carry higher risks and volatility.
Supporters and criticism
Proponents of the bill argue that Michigan would benefit from adopting a forward-looking approach to financial management. They highlight the potential of digital assets to provide fiscal resilience, diversify state-level portfolios, and demonstrate openness to emerging financial technologies. Supporters also note that the proposed 10% cap offers a balanced approach, allowing Michigan to explore the benefits of crypto exposure without overcommitting state funds.
Critics, however, warn of the inherent volatility of cryptocurrencies and the potential risk to taxpayer money. Groups such as the Michigan BTC Trade Council have expressed particular concern over the bill’s wide scope, cautioning that including cryptocurrencies beyond BTC could increase exposure to speculative and less secure assets. Skeptics argue that the unpredictable nature of crypto markets could jeopardize public finances and place unnecessary risk on state reserves.
If enacted, Michigan would become one of the few U.S. states to formally adopt a cryptocurrency reserve policy, joining a growing but still limited movement across the country. The 10% allocation cap is considered ambitious compared to other proposals, underlining Michigan’s potential role as a frontrunner in integrating digital assets into state-level fiscal policy.
The bill’s advancement reflects a broader national conversation about the role of cryptocurrencies in public finance. As policymakers grapple with balancing innovation and risk, Michigan’s decision could set an significant precedent for how states approach digital assets in the years ahead. The next stages of committee review and floor consideration will be critical in determining whether Michigan establishes itself as a leader in state-level crypto adoption.
