A Bill to Establish a Strategic Crypto Reserve Introduced in Michigan
A bill to establish a strategic crypto reserve has been introduced in Michigan, making it the 20th state to consider a digital currency-backed reserve.
Michigan Representatives Bryan Posthumus and Ron Robinson presented House Bill 4087 on Feb. 13. The bill proposes allowing the state treasurer to allocate up to 10% of both the state’s general fund and the economic stabilization fund for cryptocurrency investments.
The bill outlines that the state treasurer would be responsible 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.
Furthermore, the bill opens up the possibility of 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.
In terms of tax and fee payments, 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 now joins 19 other U.S. states that are currently considering a cryptocurrency strategic reserve and are at various stages of legislation.
Experts predict that Utah may be the first state to pass such a bill due to its 45-day legislative timeline, which is the shortest among all other states. Utah also benefits from a dedicated digital asset task force that has consistently driven crypto-related laws toward approval.
Michigan’s bill comes on the heels of a similar proposal presented in the Texas Senate by Senator Charles Schwertner on Feb. 12. Posthumus emphasized the need for Michigan to follow Texas’ lead on crypto policy by signing the “Michigan Crypto Strategic Reserve.”
Michigan has previously delved into crypto investments through 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 with a $10 million investment. This was in addition to the $6.6 million invested in ARK 21Shares’ ARKB spot Bitcoin ETF in July.