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A new legislative proposal in Michigan seeks to create a Bitcoin reserve as part of the state’s financial strategy. On February 13, Representatives Bryan Posthumus and Ron Robinson put forward HB 4087, a bill designed to update the state’s Management and Budget Act by incorporating Bitcoin investments.
With this, Michigan now joins 19 other states in the US that have introduced or are deliberating similar cryptocurrency investment policies, with final legislative approval still pending.
Michigan’s HB 4087 Bill
Under the newly proposed legislation in Michigan, the state treasurer would have the ability to invest in cryptocurrency using money from both the general fund and the economic stabilization fund, though the total investment cannot exceed 10%. The bill does not impose any restrictions on which types of cryptocurrencies can be acquired.
Furthermore, it includes a clause permitting the state to lend its crypto assets, as long as such lending does not pose additional financial risk. The treasurer is authorized to loan these assets to generate additional returns for Michigan. To maintain security, the state must store its cryptocurrency through secure custody services or invest in exchange-traded products from regulated investment companies.
Michigan’s state pension fund is already involved in cryptocurrency investments, with holdings in Bitcoin and Ether exchange-traded funds. According to a filing submitted to the US Securities and Exchange Commission (SEC) in November, the State of Michigan Retirement System reported owning 460,000 shares of the Grayscale Ethereum Trust, along with an equal number of shares in the asset manager’s Ethereum Mini Trust.
US State Strategic Bitcoin Reserves
Several US states have proposed strategic Bitcoin reserve bills which are expected to potentially drive $23 billion in BTC purchases, according to VanEck’s Matthew Sigel. This figure excludes pension fund allocations and could rise if legislation advances.
Currently, 20 states have proposed crypto reserve bills, with Arizona and Utah progressing further. Texas recently introduced a new Bitcoin investment bill, while Montana, Ohio, Florida, and others have proposed similar legislation. North Dakota is the only state to have rejected such a proposal.
This article first appeared at CryptoPotato
