Michigan’s crypto reserve bill (HB 4087) would let the state treasurer invest up to 10% of the countercyclical budget and the economic stabilization fund in approved digital assets under strict custody, security and audit rules; the bill advanced to a second reading and is now in committee.
Allows up to 10% allocation from specified state funds
Requires approved custody solutions, qualified custodians, or registered ETFs
Mandates strict security: exclusive key control, end-to-end encryption, and audits
Michigan crypto reserve bill allows up to 10% state allocation to approved digital assets with strict custody rules — read the bill, implications, and key takeaways.
What is the Michigan crypto reserve bill (HB 4087)?
The Michigan crypto reserve bill (HB 4087) would permit the state treasurer to invest up to 10% of funds from the state’s countercyclical budget and economic stabilization fund in qualified digital assets, subject to defined security, custody, and audit requirements. The bill advanced to a second reading and was referred to the Committee on Government Operations.
How would HB 4087 allocate and hold state digital assets?
The bill allows up to 10% allocation from two designated funds and limits custody to one of three approved methods: a secure custody solution, a qualified custodian (bank, trust company, or state-regulated firm), or exchange-traded products from registered investment companies. It also permits lending if risk does not materially increase.
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Michigan’s crypto reserve bill has advanced to the committee stage, allowing 10% state investment in digital assets.
Michigan’s House Bill 4087 proposes amendments to the Michigan Management and Budget Act to create a framework for a strategic crypto reserve. The legislation does not explicitly name Bitcoin but defines acceptable digital currency as one that uses encryption to create units and verify transfers while operating independently of a central bank.
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The bill was introduced in February by Republican Representatives Bryan Posthumus and Ron Robinson. It specifically authorizes the state treasurer to invest funds from the countercyclical budget and the economic stabilization fund, capped at 10% of those funds combined.
HB 4087 includes detailed security requirements for custody solutions. Key requirements include exclusive government control of private keys, end-to-end encryption, prohibition of smartphone access, geographically diversified secure data centers, multiparty transaction authorization, and regular security audits.
The bill also allows the state to lend crypto holdings to generate additional returns provided the practice does not materially increase financial risk to the funds.
The Michigan Bitcoin Trade Council opposes HB 4087 on grounds that the legislation lacks a market-capitalization threshold to restrict the state to Bitcoin only. The council argues that permitting other cryptocurrencies could introduce unnecessary centralization and risk compared with Bitcoin.
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