In brief
- Michigan’s House Bill 4087 advanced on Thursday, moving to the Government Operations Committee.
- The bill would allow up to 10% of state funds in cryptocurrency with strict security requirements.
- Michigan’s attempt is part of the inevitable state-level adoption pressuring neighboring states, Decrypt was told.
Michigan’s stalled bid to create a state-run Bitcoin reserve sprang back to life this week, with lawmakers moving House Bill 4087 to the Government Operations Committee after seven months of inaction.
The measure, introduced in February, would authorize the state treasurer to allocate up to 10% of Michigan’s general and stabilization funds into crypto.
On Thursday, the bill cleared procedural hurdles, was placed on the House’s second reading calendar, and was formally referred to the Government Operations committee.
Sponsored by Republican Reps. Bryan Posthumus (R-MI) and Ron Robinson (R-MI), the measure represents Michigan’s latest attempt yet to join Texas, New Hampshire, and Arizona, the only three U.S. states that have successfully enacted Bitcoin reserve laws.
“Hyperbitcoinization will spread across the country at the state level. It can’t be contained,” Kadan Stadelmann, Chief Technology Officer at Komodo Platform, told Decrypt. “Municipalities should consider Bitcoin reserves of their own to protect taxpayer money from potential devaluation of the dollar.”
Stadelmann believes Michigan’s detailed security provisions address weaknesses that doomed previous efforts in states like Florida.
He said taxpayers would have to trust a third-party “secure custody solution” or “qualified custodian,” and the state would keep “exclusive control over private keys,” with “disaster recovery protocols” and “regular audits/penetration testing.”
The industry observer believes success in Michigan could pressure neighboring states like Illinois, Ohio, and Pennsylvania to “revive their efforts to avoid being left behind.”
With Bitcoin hovering around $117,000, Stadelmann dismissed fears of Michigan “buying the top,” calling it “a geopolitically significant asset” that “nation-states” and now U.S. states are “naturally” choosing to accumulate.
He said states must prepare for a “multi-polar world” where “the U.S. Dollar may no longer be the sole reserve currency of the world, being joined by other currencies like perhaps Yuan or Rubles.”
Stadelmann cautioned the real mistake would be ignoring gold and silver, pointing to El Salvador’s reported move to add gold to its reserves and stressing that in the U.S., both metals are “written into the constitution.”
There are around 47 states that have introduced or are considering Strategic Bitcoin Reserve legislation, with about 26 states currently carrying active bills still under consideration, according to BitcoinLaws.io.
Earlier this month, the U.S. House advanced an appropriations bill directing the Treasury Department to study the feasibility and governance of a Strategic Bitcoin Reserve, including custody, cybersecurity, and accounting standards.
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