- Michigan revives HB 4087, allowing up to 10% of stabilization funds in crypto assets.
- The bill enforces strict rules with custody, private key control, and cybersecurity audits.
- Michigan’s move to revive Bill garners attention from both investors and policymakers.
Michigan lawmakers have revived House Bill 4087 after months of delay. The bill would let the state invest part of its stabilization and countercyclical funds in cryptocurrency. Lawmakers referred the proposal to the Government Operations Committee after seven months of inaction.
The legislation allows the Michigan state treasurer to allocate up to 10% of stabilization and countercyclical funds into crypto assets. The bill includes strict custody safeguards and requires secure third-party custody, government control of private keys, and regular cybersecurity audits. It also bans mobile access and mandates multiparty authorization for transactions.
This cautious approach reflects lessons from failed efforts in other states. Florida attempted a similar plan but faced criticism over weak security provisions. Michigan lawmakers have sought to address those concerns directly, permitting the state to loan out digital assets for returns, provided financial risk does not increase.
Unlike some proposals, Michigan’s legislation does not limit reserves strictly to Bitcoin. It enables investment in any decentralized digital asset that is compliant with encryption and verification standards. This has however elicited controversy among local advocacy groups. The Michigan Bitcoin Trade Council opposes the inclusion of non-Bitcoin assets, warning it could add unnecessary risk.
Growing State Momentum
Michigan’s progress comes as Bitcoin trades near $117,000, drawing heightened attention from both investors and policymakers. Only Texas, New Hampshire, and Arizona have enacted full Bitcoin reserve laws. Yet, more than 40 other states have introduced or are considering similar bills.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, said the push represents a national shift. He argued municipalities should consider Bitcoin reserves to protect taxpayers from dollar devaluation. He believes Michigan’s provisions could set a new model for other states. Neighboring states like Illinois, Ohio, and Pennsylvania may now feel pressure to revisit their stalled proposals.
The timing also aligns with the federal debate. Earlier this month, the U.S. House advanced a bill directing the Treasury Department to study a national Bitcoin reserve. The study will cover custody models, cybersecurity, and accounting standards. State-level activity suggests these debates are not confined to Washington. Local governments are moving forward with their own frameworks.
Related: Lawmakers and Saylor Push Ahead on Bitcoin Reserve Bill
This change mirrors broader industry sentiment. Coinbase CEO Brian Armstrong has said crypto legislation is gaining unstoppable momentum. Advocacy groups such as Stand With Crypto frame state bills as essential for legitimacy and clarity. Michigan’s action gives weight to that view by bringing digital assets directly into public finance.
The bill’s sponsors, Representatives Bryan Posthumus and Ron Robinson, introduced it in February. They believe it will prepare the state for a changing economic landscape. The bill also contains disaster recovery protocols to ensure reserves remain accessible under any scenario.
The plan is ambitious but not reckless. Lawmakers limited exposure to 10% of funds, balancing between opportunity and financial responsibility. The bill is yet to be further debated and then approved by the committee before becoming law. However, its development makes Michigan one of the pioneering states in exploring the digital reserves.
Across the country, crypto adoption is shifting from private firms to public institutions. Michigan’s move shows that states are not waiting for federal clarity before acting. Instead, they are building rules for direct participation in the digital economy.
