Michigan crypto reserve legislation moved forward on Thursday. HB 4087 advanced to a second reading and went to the Committee on Government Operations.
The bill sets rules for a strategic crypto reserve under the state’s budget law.
The sponsors are Representative Bryan Posthumus and Representative Ron Robinson. They introduced HB 4087 in February.
The text lets the state treasurer invest up to 10% of the countercyclical budget and economic stabilization fund in digital assets.
The bill does not single out Bitcoin. It defines digital assets by function and independence from a central bank. Price references in coverage, such as BTC $116,819, appear only as context.
The Michigan crypto reserve framework still centers on allocation, custody, and oversight.
Custody requirements and security rules for the Michigan crypto reserve
HB 4087 outlines strict custody requirements for the Michigan crypto reserve.
The state treasurer can use a secure custody solution, a qualified custodian like a bank or trust company, or exchange-traded products from registered investment companies. These routes keep holdings inside regulated or auditable channels.
The custody requirements include exclusive government control of private keys. They also require end-to-end encryption and no smartphone access for key use.
The infrastructure must rely on geographically diversified secure data centers to reduce single-site risk.
In addition, HB 4087 calls for multiparty transaction authorization and regular security audits.
These steps raise the control threshold for any movement of digital assets. The package creates clear guardrails for a state treasurer running a Michigan crypto reserve.
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Lending, risk limits, and the role of the state treasurer
The bill allows the state to loan out cryptocurrency. The clause applies only when lending does not increase financial risk. It gives the state treasurer another tool to manage the Michigan crypto reserve.
However, the 10% allocation cap remains the main risk limit. Funds can come only from the two named accounts. The structure ties digital assets exposure to defined balance-sheet buckets.
Operationally, the custody requirements govern how assets are held. The state treasurer must follow the approved paths. That keeps HB 4087 focused on process, not price action.
Michigan Bitcoin Trade Council opposition to HB 4087 and asset scope
The Michigan Bitcoin Trade Council opposes HB 4087. The group points to the absence of a market capitalization threshold.
It argues that the Michigan crypto reserve could buy assets other than Bitcoin under the bill’s wording.
Its statement warns about unnecessary risk from non-Bitcoin assets. It says many digital assets are centralized and subject to great risk. The council asks for tighter asset selection inside the Michigan crypto reserve.
The text also quotes a broad criterion for eligible digital assets:
“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 line captures the core scope. It explains why HB 4087 is not Bitcoin-only.
How Michigan’s crypto reserve compares with other state laws and bills
Michigan now sits with Massachusetts and Ohio, where strategic crypto reserve bills reached the committee stage, per Bitcoin Laws.
Each proposal sets an approach to digital assets and public funds. The differences lie in eligible vehicles and oversight.
Only New Hampshire, Arizona, and Texas have enacted laws that let state treasurers invest in Bitcoin and crypto assets.
These states provide direct authority for exposure. Actual allocations and custody requirements vary across the three.
Several states rejected similar plans. Montana, North Dakota, South Dakota, Wyoming, and Pennsylvania did not advance their measures.
Meanwhile, 17 states have pending legislation, according to Bitcoin Reserve Monitor.
The map shows active debate over HB 4087-style models, 10% allocation ideas, and custody requirements for digital assets.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Kriptoworld.com accepts no liability for any errors in the articles or for any financial loss resulting from incorrect information.
Tatevik Avetisyan is an editor at Kriptoworld who covers emerging crypto trends, blockchain innovation, and altcoin developments. She is passionate about breaking down complex stories for a global audience and making digital finance more accessible.
📅 Published: August 4, 2025 • 🔄 Last updated: August 4, 2025
