Michigan state shared that it is moving forward with a plan to create a state cryptocurrency reserve as House Bill 4087 passed its second reading on Thursday.
The bill was introduced by Republican Representatives Bryan Posthumus and Ron Robinson in February. It would allow the state to invest some of its money in digital currencies under certain rules.
The bill was sent to the Committee on Government Operations for review. Michigan wants to put up to 10% of money from its countercyclical budget and economic stabilization fund into cryptocurrency. This could help the state earn more money while following strict safety rules.
The bill does not mention Bitcoin specifically. Instead, it allows digital currencies that use special codes to control how money is created and moved, and that work independently of a central bank. The state treasurer could keep the cryptocurrency in three ways: using a secure storage system, a trusted bank or company, or through investment products that trade on the market.
Michigan can also lend out cryptocurrency to make extra money if it does not increase risk. The bill sets clear safety rules, like keeping private keys under government control, using strong encryption, spreading data across multiple secure locations, requiring more than one person to approve transactions, and performing regular security checks.
Not everyone is happy with the bill. The Michigan Bitcoin Trade Council said it could allow cryptocurrencies other than Bitcoin to be bought by the state. They said this “creates unnecessary risk” because other digital coins are more controlled and can lose value faster.
Despite this, the bill keeps moving through the legislature. Michigan now joins Massachusetts and Ohio, which also have bills about state crypto reserves in committee. Only New Hampshire, Arizona, and Texas currently allow state treasurers to invest in Bitcoin and other digital assets.
Meanwhile, many other states, including Montana, North Dakota, South Dakota, Wyoming, and Pennsylvania, have rejected similar bills. Seventeen more states still have bills waiting to be decided.
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