Michigan Pushes Crypto Reserve Bill Despite Criticisms of Risky Asset Scope

Michigan’s strategic crypto reserve initiative has advanced amid growing momentum for state-level Bitcoin adoption. House Bill 4087, introduced in February 2025, allows the state treasurer to allocate up to 10% of Michigan’s general and stabilization funds into cryptocurrency investments. After months of legislative delay, the bill recently cleared procedural hurdles, was placed on the House’s second reading calendar, and is now under review by the Government Operations Committee. The measure, sponsored by Republicans Bryan Posthumus and Ron Robinson, aims to position Michigan among the vanguard of states—like Texas, New Hampshire, and Arizona—that have already enacted Bitcoin reserve laws Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay^[1].

The bill mandates that crypto assets be held through approved custodians, including secure custody solutions, qualified custodians, or exchange-traded products. Security provisions emphasize exclusive state control over private keys, geographically diversified data centers, and regular audits. Proponents argue these safeguards address prior shortcomings in state-level crypto initiatives, such as Florida’s failed attempts to establish a reserve. Kadan Stadelmann, CTO of Komodo Platform, highlighted the geopolitical significance of Bitcoin as a reserve asset, noting that “nation-states” and U.S. states are increasingly adopting it to hedge against the dollar’s potential decline in global dominance Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay^[1].

Michigan’s proposal aligns with a broader trend: over 47 states have introduced or are considering crypto reserve legislation in 2024-2025, with 26 active bills under consideration. The U.S. House recently directed the Treasury Department to study the feasibility of a national Bitcoin reserve, including governance and cybersecurity standards. Analysts suggest that if enacted, Michigan’s bill could pressure neighboring states like Illinois, Ohio, and Pennsylvania to accelerate their own efforts to avoid falling behind Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay^[1]. VanEck’s analysis estimates that state-level Bitcoin reserve bills could drive $23 billion in purchases—equivalent to 242,700 BTC—if implemented Michigan Joins Growing List of States Moving Toward …^[5].

Critics, however, have raised concerns. The Michigan Bitcoin Trade Council opposes the bill for lacking restrictions on which cryptocurrencies can be acquired, arguing that non-Bitcoin assets pose unnecessary risks due to their centralized nature. The bill’s broad definition of eligible digital assets—“digital currency in which encryption techniques regulate unit generation and verify transfers”—has drawn scrutiny for potentially enabling exposure to less-established tokens Michigan Crypto Reserve Bill Advances To Second Reading^[4]. Despite this, Michigan has already experimented with crypto via ETFs, including a $10 million investment in Grayscale’s Ethereum ETF by the state pension fund Michigan joins crypto reserve race with House Bill 4087^[3].

The bill’s progress reflects a strategic shift in state financial policy. Michigan’s treasurer would also be permitted to lend crypto assets to generate returns, provided it does not increase financial risk. Tax revenues or fees collected in cryptocurrency must be converted to fiat for state budgets. This approach mirrors federal and state-level efforts to diversify reserves beyond traditional assets, particularly as Bitcoin prices approach record highs. With only three states having successfully enacted crypto reserve laws, Michigan’s initiative could serve as a model for others, though challenges remain in securing legislative consensus and navigating regulatory uncertainty Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay^[1].

If passed, the bill would mark a significant step in the U.S. states’ embrace of blockchain technology. It also underscores the growing institutional interest in crypto as a hedge against inflation and a tool for portfolio diversification. As the debate continues, the outcome of Michigan’s bill may influence not only state-level policy but also the broader trajectory of Bitcoin’s integration into public finance.