🌎 Michigan Introduces Bill to Establish Crypto Reserve

Michigan Introduces Bill to Establish Strategic Crypto Reserve

Michigan has become the 20th state to consider establishing a digital currency-backed reserve, following the introduction of House Bill 4087 on February 13. The bill, presented by Representatives Bryan Posthumus and Ron Robinson, aims to allow the state treasurer to allocate up to 10% of both the state’s general fund and the economic stabilization fund for cryptocurrency investments.

Key Provisions of the Bill

The proposed legislation outlines several key provisions, including the state treasurer’s responsibility for directly holding and managing any crypto investments using a secure custody solution, a qualified custodian, or an exchange-traded product from a regulated investment company.

The bill also opens the door for crypto lending, stating that if it can be done “without increasing the financial risk to this state,” the treasurer may loan the cryptocurrency to generate additional returns.

Furthermore, the bill mandates that any taxes or fees paid to the state in cryptocurrency must be transferred to the general fund. If a payment or fee was originally intended for another fund, the treasurer is required to reimburse that fund in fiat currency equivalent to the crypto received.

Michigan Joins Other States in Considering Crypto Reserves

Michigan joins 19 other U.S. states that are currently considering a cryptocurrency strategic reserve, with various stages of legislation underway. Some experts speculate that Utah may be the first state to pass such a bill, given its 45-day legislative timeline and dedicated digital asset task force.

Michigan’s Crypto Investment History

Michigan has previously explored crypto investments via Bitcoin and Ethereum exchange-traded funds. In November, the State of Michigan Retirement System became one of the top five holders of Grayscale’s spot Ethereum ETF via a $10 million investment, in addition to the $6.6 million invested in ARK 21Shares’ ARKB spot Bitcoin ETF in July.