Michigan Advances Bill To Build Crypto Reserve – Details
Michigan lawmakers moved a bill that would let the state hold crypto assets closer to a vote, advancing House Bill 4087 to a second reading in mid-September 2025.
According to reports, the proposal would change the Michigan Management and Budget Act to create a strategic crypto reserve under the control of the state treasurer.
Michigan Bill Allows Up To 10% Investment
The measure would let the state treasurer place up to 10% of certain state funds into qualifying digital currencies. The funds named include the countercyclical budget and the economic stabilization fund.
The bill does not list a single currency by name; rather it sets rules that a digital asset must meet to qualify. Those who back the bill say this gives the state a new tool to diversify holdings and hedge inflation risks.
Security And Custody Rules
The text would impose strict custody and security standards before any purchase is made. Reports have disclosed requirements such as exclusive government control of private keys, the use of state-regulated or bank custodians, and the option to invest through registered investment companies or exchange-traded products.
The bill also calls for technical safeguards: end-to-end encryption, no access via smartphones, geographically split secure data centers, multiparty sign-offs for transactions, and regular security audits.
Supporters Point To DiversificationSupporters argue the rules reduce the main risks. They say a careful, limited position could protect the state from dollar weakness while offering upside.
Lawmakers who introduced the bill — Representatives Bryan Posthumus and Ron Robinson — first filed it in February 2025, and its movement after roughly seven months of little action surprised some observers. Proponents also note that a few other US states have considered or passed similar measures.
Concerns From Critics And Trade GroupsNot everyone is sold. The Michigan Bitcoin Trade Council has argued the bill fails to set a market-cap floor, which could allow the state to buy smaller, less liquid tokens that swing wildly in price.
Critics worry that even with custody rules, crypto’s sharp ups and downs could leave public dollars exposed. Implementation questions remain too: who will manage key recovery, how audits will be handled, and how losses would be covered in a severe market drop.
Political And Practical RisksReports say the bill now sits with the Committee on Government Operations and could face close scrutiny in committee hearings.
If passed, Michigan would join a small group of states that have moved to let public treasurers hold crypto.
Featured image from Unsplash, chart from TradingView
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