Bill proposing creation of a Michigan Bitcoin Reserve advances after prolonged hold-up
In a significant move, Michigan's House Bill 4087 has progressed to the Government Operations Committee, marking a step closer to the Wolverine State potentially joining Texas, New Hampshire, and Arizona as the only three U.S. states to have successfully enacted Bitcoin reserve laws.
The bill, introduced by Republican Reps. Bryan Posthumus and Ron Robinson, aims to authorise the state treasurer to allocate up to 10% of Michigan's general and stabilization funds into cryptocurrency. If passed, Michigan could become the latest addition to a growing trend of state-level adoption, putting pressure on neighboring states to follow suit.
The bill's progress requires taxpayers to trust a third-party 'secure custody solution' or 'qualified custodian'. Kadan Stadelmann, Chief Technology Officer at Komodo Platform, believes that Michigan's detailed security provisions address weaknesses that doomed previous efforts in states like Florida.
Stadelmann predicts that 'Hyperbitcoinization will spread across the country at the state level and can't be contained'. He also cautions against ignoring gold and silver, pointing to El Salvador's reported move to add gold to its reserves and stressing that in the U.S., both metals are 'written into the constitution'.
The industry observer believes that success in Michigan could pressure neighboring states like Illinois, Ohio, and Pennsylvania to revive their efforts to avoid being left behind. In fact, around 47 states have introduced or are considering Strategic Bitcoin Reserve legislation, with about 26 states currently carrying active bills still under consideration, according to BitcoinLaws.io.
Interestingly, the U.S. House has also directed the Treasury Department to study the feasibility and governance of a Strategic Bitcoin Reserve, including custody, cybersecurity, and accounting standards. This federal-level investigation adds another layer to the growing interest in cryptocurrencies among U.S. states.
As the world economy evolves, Kadan Stadelmann warns states to prepare for a 'multi-polar world' where the U.S. Dollar may no longer be the sole reserve currency of the world, being joined by other currencies like perhaps Yuan or Rubles. He suggests that municipalities should consider Bitcoin reserves to protect taxpayer money from potential devaluation of the dollar, with the state maintaining exclusive control over private keys, disaster recovery protocols, and regular audits/penetration testing.
The progress of Michigan's bill is a significant development in the ongoing narrative of cryptocurrency adoption by U.S. states. As more states consider the benefits of strategic Bitcoin reserves, it will be interesting to see how this trend unfolds in the coming months.
