Michigan lawmakers have introduced four new cryptocurrency-related bills aimed at shaping the state’s approach to digital assets. These proposals focus on public pension investments, mining initiatives, income tax exemptions, and restrictions related to central bank digital currencies (CBDCs). The legislation, introduced on May 23, reflects growing interest in regulating and fostering cryptocurrency use in the state.

House Bill 4510: Crypto Investments in Public Pensions

House Bill 4510, introduced by Representative Bill Schuette, seeks to amend Michigan’s Public Employee Retirement System Investment Act. The bill would allow the state treasurer to invest in cryptocurrencies through exchange-traded products issued by registered investment companies. However, it limits eligibility to digital assets with an average market capitalization of at least $250 billion over the past year, a threshold currently met only by Bitcoin (BTC) and Ether (ETH).

House Bill 4511: Protecting Digital Asset Rights

Representative Bryan Posthumus sponsored House Bill 4511, which aims to safeguard the rights of individuals and businesses holding digital assets. The bill prohibits Michigan and its subdivisions from banning or imposing discriminatory taxes, licensing, or permitting requirements based solely on digital asset usage.

Additionally, the legislation restricts state agencies from advocating for or supporting any federal CBDC. It also protects blockchain participants by preventing limitations on node operations, staking, and asset transfers. Validators and node operators would be shielded from civil liability under this proposal.

House Bill 4512: Bitcoin Mining Using Abandoned Wells

House Bill 4512, introduced by Representative Mike McFall and a bipartisan group of lawmakers, outlines a Bitcoin mining programme leveraging energy from abandoned oil and gas wells. Participants in the programme would receive temporary access to these wells for energy generation, provided they assume responsibility for plugging, site restoration, and environmental response activities.

The bill mandates the supervisor of wells to identify eligible sites, publish detailed assessments, and manage a competitive bidding process. Selected participants must meet environmental reporting requirements, provide financial assurances, and adhere to capped plugging costs. The programme aims to merge cryptocurrency mining with sustainable energy practices.

House Bill 4513: Tax Exemptions for Mining Income

McFall also led the introduction of House Bill 4513, which proposes amending Michigan’s Income Tax Act to exempt income earned through the Bitcoin mining programme from state income tax. This amendment would apply to both individual and corporate taxpayers participating in the initiative and aligns with the framework established under House Bill 4512.

Other Cryptocurrency Developments in Michigan

These four bills are part of a broader push by Michigan lawmakers to explore cryptocurrency regulation. Earlier this year, House Bill 4087 proposed creating a strategic cryptocurrency reserve. This initiative, supported by Representatives Posthumus and Ron Robinson, would authorize the state treasurer to allocate up to 10% of the general fund and Budget Stabilization Fund for crypto investments.

Michigan’s coordinated efforts to regulate and invest in digital assets highlight the state’s growing interest in cryptocurrency as a financial tool. As these bills progress through the legislature, they could set a precedent for other states seeking to balance innovation with regulatory oversight.

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