Michigan’s Tactical Step into Crypto: Expanding Reserve Assets Following Nationwide Movement

Michigan’s House Bill 4087, designed to allow the state to invest up to 10% of its budget reserves in cryptocurrency, has progressed to a second reading in the House of Representatives following a seven-month hiatus. The bill was first proposed in February 2025 by Republican lawmakers Bryan Posthumus and Ron Robinson. Its goal is to create a formal structure for a state-managed crypto reserve, granting the state treasurer the authority to put money from the “countercyclical budget” and “economic stabilization fund” into digital assets. Now under review by the Committee on Government Operations, the bill defines eligible cryptocurrencies as digital currencies that employ cryptographic methods for managing supply and validating transactions, all without central bank oversight.

The proposed law sets out strict security protocols to address potential threats. Any assets must be protected via approved channels, such as secure custody platforms, regulated custodians, or exchange-traded funds from registered investment firms. The state is required to retain sole access to private keys, use comprehensive encryption, and implement multi-party approval for transactions.

will be dispersed across multiple locations, and regular independent audits will be required. The bill also allows the state to lend out its crypto assets to earn yields, provided this does not raise the risk to public funds.

Proponents say this initiative aligns with a broader movement among U.S. states to diversify state finances. They point to potential advantages such as protection against inflation and currency depreciation, alongside the increased institutional adoption of crypto. If enacted, Michigan would join Texas, New Hampshire, and Arizona—states that have taken similar legislative steps—though only Texas has thus far invested state capital in crypto. Opponents, meanwhile, caution that cryptocurrencies—apart from

—remain highly volatile, and the bill lacks clear guidelines for excluding riskier or less proven digital assets. The Michigan Bitcoin Trade Council has voiced objections due to the dangers posed by unregulated crypto exposure.

This legislative development mirrors a growing nationwide interest in crypto policy. The U.S. House has recently instructed the Treasury to evaluate the practicality of establishing a federal Bitcoin reserve, with attention to storage, cybersecurity, and accounting practices. Should the Michigan bill pass, it could act as a blueprint for other states, shaping future regulations and market practices. The bill’s emphasis on security may also serve as a standard for balancing technological innovation with prudent risk controls.

Internationally, government-level adoption of Bitcoin has become a key theme in 2025, with states and nations integrating digital assets into their fiscal strategies. Bitcoin’s value has climbed 25% this year, reaching a new record high of about $124,500 in August. Despite the surge in institutional participation, skepticism persists; ongoing concerns include security weaknesses, unclear regulations, and the absence of uniform protections.

The advancement of Michigan’s bill also highlights the growing rivalry among states. With 26 states now considering similar crypto reserve proposals, Michigan’s decision may prompt neighboring states like Illinois, Ohio, and Pennsylvania to speed up their own initiatives. The bill’s fate could depend on public confidence, transparent oversight, and the ability to navigate federal regulatory challenges.