By Mark James, updated October 15, 2025
A bill that will allow the state of Michigan in the United States to hold reserves in cryptocurrency has moved forward. This is the first progress it has made in seven months.
A strategic reserve is a store of a commodity or resource. They are used in times of emergency to alleviate a crisis. For example, the US has a strategic reserve of oil, which it has released during embargoes and price hikes. It also has health supplies, which are kept for national disasters. Yet Michigan has become the fourth state to create a reserve of cryptocurrencies.
Michigan’s Reserve Moves Forward
According to cryptocurrency exchange Binance, Michigan passed a bill that will allow up to 10% of state funds to be held in Bitcoin and cryptocurrency. The assets will serve as a long-term strategic reserve, aligning with moves by states like Texas and New Hampshire. In the last week, Bitcoin has been on a rollercoaster journey, settling at $110,906 as of September 25th, 2025. This was after a week in which the Bitcoin price live charts showed positive gains, then a slump over the weekend in response to a less-than-optimistic rate cut by the Fed.
The measure was backed by Republican representatives Bryan Posthumus and Ron Robinson. However, the move comes with strict rules attached to the custody and security of the assets.
A Bitcoin reserve of this nature breaks from tradition in that it is a store of a digital asset, and one that can go up or down in price. This has led many people to question the functionality of a Bitcoin strategic reserve, both at the state and federal levels.
Will It Include Cryptocurrencies Other than Bitcoin?
Bitcoin is not explicitly named in the bill, which has no specification over which cryptocurrency will be included in it. Instead, it simply refers to “digital currencies using encryption to regulate issuance and transfers, operating independently of a central bank.” The rules for custody are already quite defined in law. This states that a secure asset must be held by the state, in a custodian such as a bank or company, or with registered investment firms. However, it did not say how the wallet to store this would be created or where the keys would be held.
Crucially, the bill also allowed the lending of state-held cryptocurrency for yield generation. This was on the provision that it did not increase financial risk. In its monthly overview of the market, Binance highlighted the growth in DeFi lending. TVL jumped 72% in 2025, with Aave holding 54% market share. Maple and Euler each grew to about US$3B. The rising adoption of stablecoins and tokenized assets positions leading protocols to benefit from growing institutional demand was attributed to this.
US Federal Bitcoin Reserve
In March 2025, it was announced that the US would create a Bitcoin Federal Reserve. The aim of this was to act as a hedge against inflation and stabilize the US economy. It did not come without detractors, even those within the cryptocommunity itself.
The long-awaited Federal Reserve has been hampered by issues that have left it lagging behind. States that are rolling out their own reserves would do well to heed the mistake of this. An audit of national crypto assets that was supposed to help the formation of a Bitcoin Reserve and Digital Asset Stockpile is now overdue by 172 days. This was originally scheduled for delivery on April 5th.
More worringly, there has been no indication that the review is in process. No updates have been provided by the official US Treasury site, nor on social media. The Treasury has actively redirected any media questions to other departments, signifying that it may not have even begun.
This will be a major blow for those who had been hoping the Federal Reserve would buoy the price of cryptocurrencies. It is a second blow after it was announced that the US would not be buying crypto for the project, but instead building it from seized assets.
The audit is vital, as it is unknown how much cryptocurrency the US government currently holds. A redacted document from the US Marshals Office suggests it was around 28,988. Yet online crypto trackers have suggested it could be as high as 200,000 BTC.
State-Level Cryptocurrency Reserves
The state will now join Texas, New Hampshire, and Arizona in being the only ones that have enacted Bitcoin reserve laws. It is believed the move could pressure neighbouring states, such as Illinois and Pennsylvania, to reinvigorate their efforts.
Each state has, however, enacted its Bitcoin reserve differently. New Hampshire has set out its stall and allowed the state to purchase Bitcoin with taxpayers’ money. In Arizona, all Bitcoin in reserves will come from seized assets, much like the national concept.
To date, around 47 states have proposed or are in the process of considering Bitcoin legislation related to reserves. Of these, around 26 have bills in process. It seems that more states will follow suit, not if, but when.
