Michigan Restarts Cryptocurrency Reserve Bill After Seven Months of Hiatus
After a seven-month hiatus, Michigan House Bill 4087 officially returned to the table when it reached second reading and was referred to the Government Operations Committee on Thursday. This is seen as a significant step in the state’s efforts to establish a strategic cryptocurrency reserve fund – something that could change the way local governments manage their financial resources.
The Bill’s Main Content
Bill 4087, introduced by Republican congressmen Bryan Posthumus and Ron Robinson in February 2025, proposes allowing the Michigan treasurer to allocate up to 10% of the Countercyclical Budget Fund and Economic Stabilization Fund to digital assets.
A number of regulatory principles are in place to ensure safety:
Assets must be custodial through a licensed bank, trust company, or trading solution.
The government has exclusive control over private keys.
The system requires end-to-end encryption, decentralized data centers, multi-signature transactions, and regular security audits.
Notably, the bill does not specifically mention Bitcoin, but rather a broad definition of “digital currency” that qualifies, broadening the scope of investments to include a wide range of assets.
Controversy in the Bitcoin community
This point has drawn strong backlash from the Michigan Bitcoin Trade Council, which argues that the broad scope would expose the state to unnecessary risk, while Bitcoin is the only digital asset that is sufficiently decentralized and has a sustainable market capitalization.
Michigan’s pension fund already has exposure to Bitcoin and Ethereum ETFs, paving the way for digital asset management. However, Bitcoin advocates want to ensure that state reserves are focused solely on BTC rather than being spread across other, more volatile coins.
Broader Trend in the US
Michigan's move is part of a broader wave after the Trump administration called on states to explore establishing a national cryptocurrency reserve. To date:
15 states have proposed plans for Bitcoin reserves.
Some states, such as New Hampshire, Arizona, and Texas, have passed laws allowing direct investment.
Pennsylvania is leading the way with the first state-level Bitcoin reserve bill from late 2024.
Meanwhile, some other states, such as Montana, Wyoming, and South Dakota, have rejected the plan. This reflects a divide in opinion: one side sees Bitcoin as a strategic reserve asset, the other side is concerned about volatility and security risks.
Long-term implications
According to Chainalysis' analysis, if more states start accumulating Bitcoin, the supply-side impact could be pronounced due to the fixed supply of 21 million coins. As government demand increases, this could potentially provide a long-term boost to value, pushing Bitcoin closer to maturing as a global reserve asset.
However, Michigan’s bill still has a long way to go before it is fully passed. The state will have to balance the financial growth opportunity with the risk of price volatility to ensure the public’s bottom line.