Michigan lawmakers are moving forward with a bill to create a state-level crypto reserve, moving House Bill 4087 to a second reading on Thursday and referring it to the Committee on Government Operations.
But it wasn’t quite clear what crypto assets can be used for the reserve. It doesn’t name Bitcoin directly and just leaves a broad definition that takes eligible assets as “digital currencies using encryption to regulate issuance and transfers, operating independently of a central bank.”
In any case, custody rules are pretty much defined: Assets must be held through either a secure custody system controlled by the state, a qualified custodian such as a bank or trust company, or exchange-traded products from registered investment firms.
Moving on, security requirements include exclusive government control of private keys, multiparty authorisation, geographically distributed data centers, regular audits, etc. The bill also allows lending of state-held cryptocurrency for yield generation, provided it does not increase financial risk.
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The proposal would amend the Michigan Management and Budget Act to let the state treasurer allocate up to 10% of the countercyclical budget and economic stabilisation fund into cryptocurrencies.
The move marks one of the few recent developments in U.S. state-level crypto reserve initiatives, an area that has seen limited activity in recent months. Introduced in February by Republican representatives Bryan Posthumus and Ron Robinson, the bill is framed as a “strategic reserve mechanism”.
Governments, states, and corporations are adding BTC to balance sheets as part of broader financial strategies. If enacted, Michigan would join Texas, New Hampshire, and Arizona in passing Bitcoin reserve legislation. Of those, only Texas has funded its reserve, committing US$10 million (AU$15.3 million) in June.
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José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.
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