Michigan Legislators Unveil Bold Initiative for State Treasury’s Bitcoin Reserve Strategy

A recent legislative initiative in Michigan aims to establish a Bitcoin reserve as part of the state’s fiscal strategy. On February 13, Representatives Bryan Posthumus and Ron Robinson introduced HB 4087, a bill crafted to amend the state’s Management and Budget Act by including Bitcoin investments.

Consequently, Michigan now aligns with 19 other states in the US that have either proposed or are considering similar cryptocurrency investment regulations, with ultimate legislative approval still awaited.

Michigan’s HB 4087 Legislation

According to the newly suggested legislation in Michigan, the state treasurer would be empowered to invest in cryptocurrency using funds from both the general fund and the economic stabilization fund, although the total investment must not exceed 10%. The bill places no limitations on which cryptocurrencies can be procured.

In addition, it features a provision allowing the state to lend its crypto holdings, provided that such lending does not introduce extra financial risks. The treasurer is permitted to offer these assets as loans to foster additional returns for Michigan. For security purposes, the state is required to securely store its cryptocurrency via custody services or invest in exchange-traded products from regulated investment firms.

The state pension fund of Michigan is already engaged in cryptocurrency investments, with stakes in Bitcoin and Ether exchange-traded funds. According to a submission made to the US Securities and Exchange Commission (SEC) in November, the State of Michigan Retirement System reported holding 460,000 shares of the Grayscale Ethereum Trust, alongside an equivalent number of shares in the asset manager’s Ethereum Mini Trust.

Strategic Bitcoin Reserves in US States

A number of US states have put forth strategic Bitcoin reserve legislation that could potentially lead to $23 billion in BTC acquisitions, as per VanEck’s Matthew Sigel. This estimate does not account for pension fund contributions and could increase if the legislative measures progress.

At present, 20 states have initiated crypto reserve bills, with Arizona and Utah advancing further in the process. Recently, Texas has introduced a new Bitcoin investment bill, while Montana, Ohio, Florida, and others have suggested comparable legislation. North Dakota remains the sole state to have declined such a proposal.