Michigan Proposes Ban on CBDC and State Investment in Major Cryptocurrencies
Michigan lawmakers have introduced four major cryptocurrency bills signaling a significant shift in the state’s approach to digital assets. The proposed legislation includes a ban on the use and promotion of a U.S. central bank digital currency (CBDC), aligning Michigan with broader anti-CBDC sentiment at the national level. Another bill permits the state treasurer to invest public retirement funds in digital assets, strictly limiting these investments to cryptocurrencies with an average market capitalization above $250 billion, such as Bitcoin. These investments must be made through exchange-traded products issued by regulated companies. Additional measures aim to boost the state’s Bitcoin mining industry by allowing the revitalization of abandoned oil and gas wells for mining operations and establishing tax rules for related income, particularly for environmentally responsible mining activities. The bills also prohibit the state from banning ownership of digital assets, denying licenses, or restricting blockchain node operations and staking. If enacted, these pro-crypto policies could make Michigan a leader in institutional adoption, foster local innovation, and influence crypto regulation trends nationwide. Crypto traders should watch Michigan’s legislative progress for potential impacts on market sentiment, regional adoption, and institutional demand for major cryptocurrencies.
Bullish
The proposed Michigan crypto legislation is likely to have a bullish impact, particularly for major cryptocurrencies like Bitcoin. By explicitly banning a U.S. CBDC and protecting residents’ rights to own and use digital assets, the bills reinforce a pro-crypto legal environment. Allowing state retirement funds to invest in select high-market-cap cryptocurrencies through regulated vehicles signals increasing institutional interest and potential inflows into established coins like Bitcoin. The specific support for eco-friendly mining and regulatory certainty further enhances Michigan’s attractiveness for the crypto sector. Historically, similar pro-crypto state initiatives have contributed to positive market sentiment and generated incremental buying interest among both retail and institutional players. While immediate statewide adoption may be gradual, the longer-term effect is increased legitimacy, mainstream appeal, and possible regional competitive dynamics encouraging other states to follow suit.