Following the guidelines set out by the president, Michigan has become the latest state to propose a crypto reserve bill, making it the 20th state to do so.
Ron Robinson and Bryan Posthumus, Michigan state representatives, introduced the Bill, named Bill HB 4087 in February of this year. The bill aims to amend the state’s Management and Budget Act to enable the implementation of a strategic Bitcoin and other cryptocurrency reserve.
The integration of Bitcoin into a country-wide reserve comes from the growing acceptance and adoption of cryptocurrency as a whole. President Donald Trump has stood by his promise to make America the ‘Crypto Capital of the Planet’ and many sectors and businesses across the US are beginning to integrate digital assets into their day-to-day. In fact, crypto has become so popular that over 28% of US adults state that they have invested in at least one kind of digital asset.
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If the bill is passed then Rachael A. Eubanks, Michigan’s state treasurer, will be able to use an economic stabilization fund and a general fund to invest in crypto on behalf of the state. It should be noted, however, that the bill hasn’t outlined any limits, nor has it provided any guidelines on which kinds of cryptocurrencies can and can’t be purchased in order to fill the reserve.
Through this, there is certainly the potential that Michigan is hoping to build a crypto reserve that goes beyond just Bitcoin, and could integrate lesser-known cryptocurrencies.
Another aspect of the bill is ruling on the lending of crypto. Should the bill be passed, cryptocurrencies could be loaned without increasing financial risk for the state. Should this occur, the responsibility of lending the currencies would fall on the state treasurer.
Already, Michigan has had some exposure to cryptocurrency with Bitcoin and Ether exchange-traded funds being used for the state pension fund.
Additionally. Posthumus has floated the idea of a Michigan-created and managed form of cryptocurrency named “MichCoin”. He plans to make this a stablecoin, meaning its value would be tied to the value of gold and silver reserves of the state.
As Michigan has become the latest to propose the crypto bill, New Hampshire has taken the top spot for the first state to fully implement it. Before Michigan, Texas, which has a long standing history of support for crypto, was the last state to propose the integration of cryptocurrency into the financial running of the state. They filed legislation recently, hoping to allow Texas to buy and trade in cryptocurrencies.