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@ Michigan Bitcoin Policy Institute
2025-03-13 20:05:15The Michigan Bitcoin Policy Institute is committed to promoting sound money policies and fostering a supportive environment for Bitcoin in Michigan. In light of the recent house bills related to cryptocurrency, digital asset mining, and Bitcoin, we would like to share our insights and position on these important matters.
HB 4085: Promoting a Level Playing Field for Miners
We strongly support HB 4085, which aims to create a level playing field for Bitcoin miners by treating them similarly to data centers. This bill allows miners to operate without discrimination, potentially creating new job opportunities and attracting significant investment to the state. However, we recommend amending the bill to remove the minimum power consumption requirement for defining a 'digital asset mining business.' This threshold could stifle innovation and prevent smaller, more agile mining operations from setting up in Michigan. By removing this requirement, Michigan can create a more welcoming environment for businesses of all sizes, from small startups to large-scale operations. Smaller miners can utilize stranded energy sources, aid in energy curtailment situations, and help drive economic growth, making Michigan a hub for Bitcoin mining.
HB 4086: Concerns About MICHcoin
We have significant concerns about HB 4086, which proposes a precious metals-backed currency called MICHcoin. The issues surrounding metal auditability, true value, scarcity, stock-to-flow arbitrage between different metals, and storage/ transportation security are substantial. These concerns could lead to unintended consequences for Michigan taxpayers. There are many ETFs available that are backed by precious metals and regulated by the SEC, which can serve the same purpose. Therefore, we do not support this bill.
HB 4087: Michigan Cryptocurrency Strategic Reserve
While HB 4087 is advertised as a "Michigan Bitcoin Strategic Reserve," it fails to mention Bitcoin specifically and instead references cryptocurrency. We are alarmed by the potential for loaning out the underlying assets, which could lead to a fractional reserve system. Historical examples have shown that such systems can be prone to catastrophic failures when a large number of claimants attempt to redeem their assets simultaneously. The risk of a 'bank run' or a collapse of the system is very real, and we fear that Michigan taxpayers could be left holding the bag.
We believe that Bitcoin's unique properties make it the only suitable choice for such a reserve. Bitcoin is a decentralized, open-source, and censorship-resistant form of money that operates on a peer-to-peer network, allowing for direct transactions between parties without the need for intermediaries. Its decentralized nature is ensured by a global network of nodes and miners, who work together to validate and record transactions on a public ledger called the timechain/ blockchain. This decentralized architecture makes it virtually impossible for any single entity to control or manipulate the Bitcoin network, ensuring that it remains censorship-free and accessible to all. Furthermore, Bitcoin's limited supply and predictable monetary policy make it a sound money.
We would support a revised version of this bill that prioritizes Michigan's self-custody of Bitcoin only, in a secure, air-gapped, and multi-signature solution. This approach would allow the state to benefit from the unique properties of Bitcoin while minimizing the risks associated with third-party custodians or exchange-traded products.
Conclusion
As we have recently seen at the federal level, Bitcoin has its own designated reserve because of its unique properties. The Michigan Bitcoin Policy Institute is committed to engaging in open and respectful dialogue with policymakers to ensure that Bitcoin policies in Michigan are informed by a nuanced understanding of Bitcoin and its characteristics. We are willing to dedicate time to discussing these matters further with relevant parties to inform policy decisions that benefit the Taxpayers of the State of Michigan.
We appreciate your time and consideration.
Thank you for your service to the State of Michigan Taxpayers.
Sincerely,
Michigan Bitcoin Policy Institute
Links to bills:
https://legislature.mi.gov/documents/2025-2026/billintroduced/House/pdf/2025-HIB-4085.pdf
https://legislature.mi.gov/documents/2025-2026/billintroduced/House/pdf/2025-HIB-4086.pdf
https://legislature.mi.gov/documents/2025-2026/billintroduced/House/pdf/2025-HIB-4087.pdf