Michigan Lawmakers Introduce Four Crypto Bills, Allowing State Funds to Invest 10% in Crypto

Michigan lawmakers have introduced four significant crypto-related bills, covering a range of topics including crypto mining, central bank digital currencies (CBDCs), and the integration of cryptocurrencies into state retirement funds. These bills represent a comprehensive approach to integrating cryptocurrencies into various aspects of Michigan’s financial and regulatory landscape.

The first bill, House Bill 4510, introduced by Republican state Representative Bill Schuette, aims to amend Michigan’s Public Employee Retirement System Investment Act. This amendment would permit the state treasurer, currently Rachael Eubanks, to invest in cryptocurrencies that have maintained an average market capitalization above $250 million over the past calendar year. Currently, Bitcoin (BTC) and Ether (ETH) are the only cryptocurrencies that meet this threshold. The bill stipulates that any cryptocurrencies must be held in the form of an exchange-traded product issued by a registered investment company. A similar bill was introduced earlier in February, allowing the state treasurer to allocate up to 10% of Michigan’s Budget Stabilization Fund into crypto.

The second bill, House Bill 4511, led by Republican Representative Bryan Posthumus, is a bipartisan effort that seeks to prohibit Michigan from banning cryptocurrencies or imposing licensing requirements on crypto holders. Additionally, it aims to prevent state officials from advocating or supporting a proposed CBDC from the federal government. The bill defines advocating or supporting a CBDC as issuing a memorandum or official statement endorsing a CBDC proposal related to its testing, adoption, or implementation.

The third bill, House Bill 4512, introduced by a bipartisan group led by Democratic Representative Mike McFall, proposes the creation of a Bitcoin mining program. This program would allow operators to set up mining operations at abandoned oil and gas sites. A supervisor would be assigned to determine the potential oil or gas production from the site, identify the last operator, and assess how long the site has been unused. Participants in the program would need to submit legal documents outlining their organizational structure, demonstrate their ability to operate as a Bitcoin mining entity, and provide estimates of the breakeven price for a profitable venture.

The fourth bill, House Bill 4513, also filed by a McFall-led bipartisan group, seeks to amend Michigan’s income tax laws. This amendment would include income obtained from the proposed Bitcoin mining program, ensuring that any earnings from these operations are subject to state taxation.

By allowing state retirement funds to invest in cryptocurrencies, Michigan aims to diversify its investment portfolio and potentially benefit from the growth of the crypto market. The prohibition on CBDC advocacy reflects a cautious approach to digital currencies issued by central banks, ensuring that Michigan maintains control over its financial policies. The establishment of Bitcoin mining operations at abandoned oil and gas sites not only promotes the use of renewable energy but also creates new economic opportunities in the state. The amendment to income tax laws ensures that any earnings from these mining operations are properly taxed, maintaining the state’s revenue streams. Overall, these bills demonstrate Michigan’s proactive stance on cryptocurrency regulation, positioning the state as a leader in the evolving digital economy.