Michigan Lawmakers Introduce Four Bills to Regulate Cryptocurrency

Michigan lawmakers have unveiled four bills about cryptocurrency, focusing on state retirement fund investments, prohibiting bans on crypto and CBDCs, and authorising Bitcoin mining at abandoned sites. These bills aim to potentially reshape crypto regulations in the state.

In a significant move, Michigan lawmakers have put forward four new bills focused on cryptocurrency, which include regulations on crypto mining, the establishment of central bank digital currencies (CBDCs), and the use of crypto within state retirement funds. These proposals could reshape Michigan’s approach to digital assets in various sectors.

The first bill, introduced by Republican state Representative Bill Schuette, is House Bill 4510. On May 21, it was proposed that Michigan’s Public Employee Retirement System Investment Act be amended to allow the state treasurer, currently Rachael Eubanks, to invest in certain cryptocurrencies. To qualify, a cryptocurrency must have averaged a market cap of over $250 million in the past year, with Bitcoin (BTC) and Ether (ETH) currently being the only contenders.

Following up on a similar initiative from February aimed at allocating up to 10% of Michigan’s Budget Stabilization Fund to crypto, Bill 4510 strictly states that only exchange-traded products issued by registered investment companies would be considered for investment. This detail could impact decisions going forward as investments are made under this bill.

The second bill, HB 4511, introduced by Republican Representative Bryan Posthumus, aims to establish clear boundaries regarding cryptocurrency regulations in Michigan. This bill would prevent any form of ban on cryptocurrency and ensure there are no licensing requirements imposed on crypto holders. Furthermore, it seeks to prohibit state officials from backing or promoting a federal CBDC, specifically defining such advocacy as issuing any official support for CBDC initiatives.

Another focal point in this legislative package is the cryptocurrency mining sector. Proposed House Bill 4512, spearheaded by a bipartisan group led by Democrat Mike McFall, addresses this by creating a Bitcoin mining program specifically for abandoned oil and gas sites. This bill is noteworthy as it frames new opportunities for using previously defunct properties.

Under HB 4512, a designated supervisor would evaluate how much oil or gas can be extracted from these sites and ascertain important details about the site’s last use. Participants in the Bitcoin mining program must provide a slew of documentation, including proof of organisational structure and estimates concerning the operational breakeven point of their mining ventures.

Lastly, House Bill 4513—again led by McFall’s bipartisan group—aims to modify Michigan’s income tax laws. The proposed changes would ensure that income generated from the newly set up Bitcoin mining program is taxable, potentially increasing state revenue from this emerging digital sector.

These legislative moves align with broader national conversations about the role of cryptocurrency in the economy. As some see digital currencies as a threat to traditional banking systems, others advocate for their integration into established frameworks. Michigan’s approach could serve as a model or a warning for other states contemplating similar cryptocurrency policies.