- Michigan legislators have sent House Bill 4087, which establishes a strategic crypto reserve, to the Government Operations Committee.
- The bill demands strict requirements for storage, private key control, audits, geographic diversity in data centers, and lending limits.
- Texas has laws passed allowing state investments in crypto, whereas New Hampshire, and Arizona have proposals in place.
The state of Michigan is one step closer to enacting a law that allows up to 10% in crypto, with current custody/security rules, and a broad crypto definition. After months of delay, on September 18, 2025, some procedural steps occurred. The motion to discharge the Communications and Technology Committee was approved. Post this, the bill was placed on second reading in the House and referred to the Government Operations Committee.
That puts it in a stage where there should be debate, amendments, committee hearings. Then, if passed in the House, the bill would move to the Senate, and eventually to the Governor’s desk.
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What the bill proposes
In early 2025, Michigan legislators filed a bill, House Bill 4087, to establish what is being called a “strategic Bitcoin reserve” as part of state finance policy. The purpose of the bill is to allow the state treasurer to allocate a portion of Michigan’s reserves into cryptocurrencies under certain conditions.
The bill would authorize the state treasurer to invest up to 10% of Michigan’s general fund and its economic stabilization “rainy day” fund in cryptocurrencies. The bill also defines “cryptocurrency” broadly as any digital currency:
“in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds … and that operates independently of a central bank.” This definition could include Bitcoin, but also others (Ethereum, etc.), provided they meet those criteria.
Moreover, the bill demands strict requirements for storage, private key control, audits, geographic diversity in data centers, and limits on risk-taking, especially for lending.
Diversification & inflation hedge, albeit the volatility
Proponents of the bill argue that holding a portion of reserves in crypto can serve as a hedge against inflation, dollar devaluation, or other macroeconomic shocks. Being open to crypto investments positions Michigan among early adopters, giving it potential advantages in flexibility, investment returns, and financial innovation.
But critics of HB 4087 and other crypto reserve proposals raise several concerns. Even though Bitcoin has had periods of strong performance, there are wild swings. Critics argue that a 10% allocation is nontrivial. If the crypto market crashes, taxpayers could feel that pain. There is concern that riskier or less established tokens could be included. Some worry about “altcoins” with low liquidity, low market cap, or that have governance or centralization issues.
Michigan is part of a wider U.S. trend in which states are considering or passing strategic crypto reserve bills. Texas, Arizona, and New Hampshire, among others, are states with similar bills passed or in process. While the bill has been removed from its initial committee, its fate will depend on amendments, committee debate, political dynamics, and how the bill addresses criticisms.
