Michigan Advances Crypto Reserve Legislation Amid Concerns Over Broad Asset Classification

Michigan’s drive to establish a state-level crypto reserve has progressed as momentum builds around state-based

adoption. House Bill 4087, put forward in February 2025, would authorize the state treasurer to invest up to 10% of Michigan’s general and stabilization funds in cryptocurrencies. After being stalled for several months, the bill has now advanced past procedural blocks, moved onto the House’s second reading agenda, and is currently under consideration by the Government Operations Committee. Sponsored by Republican lawmakers Bryan Posthumus and Ron Robinson, the measure aims to put Michigan at the forefront among states such as Texas, New Hampshire, and Arizona, which have already passed Bitcoin reserve legislation Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay [ 1 ].

The legislation requires that all crypto assets be stored with qualified, approved custodians, such as secure holding solutions, regulated custodians, or exchange-traded products. Security protocols include exclusive state control of private keys, geographically diverse data centers, and routine audits. Supporters say these protections are meant to address weaknesses that hindered earlier state crypto efforts, like Florida’s unsuccessful reserve proposal. Kadan Stadelmann, Komodo’s CTO, emphasized the geopolitical relevance of Bitcoin as a reserve, highlighting how both U.S. states and countries are increasingly using it to protect against the possible erosion of the dollar’s dominance Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay [ 1 ].

Michigan’s bill is part of a nationwide movement: more than 47 states have introduced or are weighing crypto reserve bills in 2024-2025, with 26 currently under review. The U.S. House has also asked the Treasury Department to examine the possibility of a national Bitcoin reserve, looking at issues like governance and cybersecurity. Experts believe that if Michigan enacts this bill, it could spur nearby states such as Illinois, Ohio, and Pennsylvania to accelerate similar initiatives to remain competitive Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay [ 1 ]. According to VanEck, state-level Bitcoin reserve laws could prompt $23 billion in purchases—or roughly 242,700 BTC—if fully implemented Michigan Joins Growing List of States Moving Toward … [ 5 ].

Nonetheless, critics have voiced their objections. The Michigan Bitcoin Trade Council is against the bill, citing the lack of limits on which types of cryptocurrency could be acquired and warning that non-Bitcoin assets could bring added risks due to their centralized structures. The bill’s broad definition of eligible digital assets—“digital currency in which encryption techniques regulate unit generation and verify transfers”—has been criticized for opening the door to lesser-known tokens Michigan Crypto Reserve Bill Advances To Second Reading [ 4 ]. Despite these concerns, Michigan’s state pension fund has already engaged with crypto via ETFs, including a $10 million allocation to Grayscale’s Ethereum ETF Michigan joins crypto reserve race with House Bill 4087 [ 3 ].

The advancement of the bill signals a notable change in Michigan’s financial strategy. The treasurer would also be allowed to lend crypto assets to earn returns, as long as doing so does not increase risk to state funds. Any taxes or fees collected in digital currency would have to be converted to U.S. dollars for budget purposes. This mirrors broader efforts by both state and federal governments to diversify reserves beyond traditional holdings, especially as Bitcoin’s price nears historic highs. With only three states having successfully passed similar laws so far, Michigan’s proposal could become a blueprint for others, though it still faces challenges in gaining full legislative approval and dealing with regulatory uncertainties Michigan Bitcoin Reserve Bill Moves Forward After Months of Delay [ 1 ].

If enacted, the legislation would represent a pivotal moment in the adoption of blockchain technology by U.S. states. It also highlights the increasing interest from institutions in utilizing crypto as a guard against inflation and as a means of portfolio diversification. As discussions progress, the outcome of Michigan’s proposal could shape not just state policy but also the wider integration of Bitcoin into public finance.