With the advancement of House Bill 4087, Michigan has taken a step forward in incorporating cryptocurrency within its fiscal framework. In the legislation’s second reading, it was referred to the Committee on Government Operations on September 18, 2025, and seeks to amend the Michigan Management and Budget Act to the develop the foundation of a strategic reserve in cryptocurrency at the state level. This positions Michigan alongside a growing number of US states interested in digital assets as a means of economic resilience. While integration invites discourse on the risks and rewards of such investments, the state is attempting to strike a balance.
The Proposal is a Controversial Investment Framework.
Spearheaded in February 2025 by Republican Representatives Bryan Posthumus and Ron Robinson, House Bill 4087 permits the state treasurer to spend a maximum of 10% of Michigan’s countercyclical budget and economic stabilization fund on cryptocurrency investments. While many state proposals focus only on Bitcoin, the bill defines eligible assets as digital currencies that are encrypted and operate autonomously from central banks in the generation and verification of transactional units. Such a loose framework has drawn concern as it may leave Michigan’s budget vulnerable to unpredictable variables that will influence assets.
The law specifies requirements for holding crypto assets, requiring that they minimally be held in one of three methods: secure custody solutions, custody relations with banks, trust companies, or qualified custodians an exchange-traded crypto product offered by robo-advisors, and custodial investment vehicles issued by registered investment companies. Furthermore, the legislation allows the state to loan out crypto assets for the purpose of obtaining income, so long as doing so does not elevate the level of financial risk. These actions are intended to encourage crypto innovation while ensuring Michigan’s financial fiduciary responsibility, determining the parameters a secure regulatory environment will place on the state’s crypto reserve.
The custody of public funds requires, computer code does not social custody laws, for custodians to meet the standards of House Bill 4087 born of the need for the trust that such fiduciary assets are secure. Crypto custody measures, such as partitioning to exclusion of the smartphone tether, geographic distribution of collecting divorcing control over crypto instruments where the public and the public and the secure between, recutting control over transaction keys held by the proxy, multiple parties to controlled and private keys, private keys at the transaction earning of the concealment of the crypto devices, the crypto devices of the surveillance of the addresses of the crypto assets and transaction where the periodical of the Microsoft and the Whole Earth, protective of censorship, controlled by gates and their gates, to The House Index and Quicksand. These measures aim to prioritize Michigan’s public equity of Michigan against risk of dominion, investment operational against and cyber threats.
Controversy and Opposition
The Michigan Bitcoin Trade Council claims the bill's definition of eligible cryptocurrencies is overly broad and unreasonably risks assets other than Bitcoin. This advocacy group worries that altcoins governance is usually centralized and highly volatile, and thus are detrimental to the stability of Michigan's reserve. Thus they argue that there should be a market capitalization requirement to the investments, restricting them to Bitcoin, which is more decentralized and safer. This controversy illustrates the tension between diversification and risk management at the nurtured-plant level of crypto adoption.
Michigan in the National Context
The advances on House Bill 4087 in Michigan puts it on the same level as Massachusetts and Ohio, where similar crypto reserve bills are pending at the committee level. However, unlike them, they have been able to pass laws that allow state treasurers to purchase Bitcoin and other digital assets, which New Hampshire, Arizona, and Texas have been able to successfully do. Conversely, the strategic proposal to reserve sophisticated Bitcoin as an asset has been turned down in the states of Montana, North Dakota, South Dakota, and Wyoming, which clearly illustrates the divergence of policies that exists in the country. Perhaps more interestingly, 17 of the other states that have similar policies pending consider Michigan's position to be more crypto-friendly than the resting position to be.
The activity of House Bill 4087 suggests that there is positive progress on Michigan policies that align with the innovative cryptocurrency sector. If passed, legislation like this could extend the Michigan economic innovative leadership influence, perhaps triggering other areas to modify policies as well. Nevertheless, the upcoming legislation on the matter of digital assets might run into trouble due to the broad brush that the legislation draws over the assets.
Moving Forward
In the case of Michigan, cryptocurrency investment legislation is on the boldest side and House Bill 4087 is a positive contribution toward digital finance. The flexible assets and legislation on the risk control and risk managed custody solutions demonstrates investment protection. However, House Bill 4087 might change Michigan’s status of not being one of the few states like New Hampshire, Arizona and Texas that have a legislative framework supporting the crypto reserve. The very few crypto legislation that exist demonstrates that there is an increasing interest widely toward crypto assets especially to orient Michigan House attention toward the issue.
The crypto lacking House Bill 4087 shows crypto assets to be silent, the debate is focused on to what ends public finance might be using crypto assets. The crypto wallets and other integrations of blockchain technology to government possessions might serve either as a guide or as a warning on how Michigan’s experience is a test case that other states are grappling with for public finance.
