Michigan Advances House Bill 4087 for 10% Crypto Reserve
Michigan House Bill 4087 has advanced to its second reading, proposing to allocate up to 10% of the Economic Stabilization Fund and the Countercyclical Budget Reserve into eligible cryptocurrencies. House Bill 4087 defines eligible digital assets as cryptographically secured and independently operated without central bank oversight, aiming to build a strategic crypto reserve. The bill mandates strict security protocols — state control of private keys, end-to-end encryption, geographically dispersed data centers, and regular audits — alongside three approved custody options: secure on-chain wallets, regulated custodians such as banks or trust companies, and exchange-traded products from registered investment firms. It also allows limited lending of held crypto for additional yield if it does not increase financial exposure. Mirroring similar efforts in New Hampshire, Arizona and Texas, the proposal faces opposition from the Michigan Bitcoin Trade Council over market-cap thresholds and token centralization, while supporters cite the state pension fund’s recent ARK Invest Bitcoin ETF purchase as evidence of modernizing fiscal strategy and boosting economic resilience. Now under Government Operations Committee review ahead of a full House vote, the bill signals growing institutional interest in cryptocurrency investment. Traders should monitor committee debates and potential pilot allocations for insights into broader public-sector crypto involvement and its impact on market sentiment.
Bullish
The advancement of Michigan House Bill 4087 to authorize a 10% allocation of state reserves into eligible cryptocurrencies is a clear sign of growing institutional adoption. In the short term, news of a potential public-sector crypto reserve can boost market sentiment and trading volumes for major tokens, particularly Bitcoin via implied demand from future pilot allocations and ETF exposure. Over the long term, the bill’s strict security protocols and accepted custody solutions reduce regulatory hurdles, paving the way for wider government-backed investments. Although opposition from the Michigan Bitcoin Trade Council highlights risks around token selection, the state pension fund’s ARK Invest Bitcoin ETF purchase underpins a more resilient fiscal strategy. Overall, this measure is likely to reinforce bullish momentum and attract further institutional capital.