MI Bankers Worried About Michigan-Based Cryptocurrency

(Source: MIRS.news, Published 05/08/2025) As some lawmakers explore the future of Michigan possibly having its own state-sponsored cryptocurrency, the Michigan Bankers Association (MBA) cautions the Legislature against pursuing currencies not related to the U.S. dollar and getting ahead of the federal government.

"We want to ensure that everyone that's dealing in those kinds of currencies are held to the same kinds of responsibilities and regulations and oversight, so we don't create, inadvertently, areas where consumers may be pushed to an area that is less regulated but potentially detrimental," said Patricia Herndon, the MBA's chief policy officer.

On Wednesday, Herndon spoke to the Senate Finance, Insurance and Consumer Protection Committee, describing the MBA's top issues and operations. She mentioned "MichCoin," a state-sponsored cryptocurrency that would be created under HB 4086 .

Rep. Alabas Farhat (D-Dearborn) is sponsoring the concept along with Reps. Bryan Posthumus (R-Rockford) and Ron Robinson (R-Utica). Unlike Bitcoin – rooted in non-physical digital assets, achieved from calculations performed over computers – MichCoin would be linked to Michigan's gold and silver reserves.

"There's a desire to potentially create . . . a stablecoin that would be an investment coin, that would have interest attached to it. We would caution against things that are non-U.S. dollar, currency-related," Herndon said. "In this case, it would be rooted in gold and silver. But in other cases, it might be less so rooted in something that's stable despite the 'stablecoin' moniker that's attached to it."

Currently, Herndon explained, the MBA is getting its arms around the U.S. Senate and House proposals to regulate stablecoins that can cover overseas payments, trying to figure out how those funds can be transferred legitimately and can be tracked.

Unlike Bitcoin, stablecoins are fixed one-to-one with stable assets like the U.S. dollar or gold. But overall, Herndon flagged to the Senate panel that there are a lot of "nefarious activities" still in the cryptocurrency sphere.

"I know that there are a lot of good players in that marketplace that are looking for some greater legitimacy and regulation around that. However, we're still experiencing a lot of pushback on that because of the untraceability of a lot of those funds," she said.

Marketplace inequality, Herndon explained, essentially comes down to whether individuals are playing in the same sandbox with the same regulatory framework that must treat people equally.

Other bills in the House's MichCoin package include HB 4085, prohibiting local governments from placing sound and zoning restrictions on crypto-mining facilities that do not also apply to data centers, which contain data-processing infrastructure for digital corporations.

Additionally, there is HB 4087, authorizing the state Treasurer to invest up to 10 percent of available funds in Michigan's General Fund revenues and "rainy day" savings fund into cryptocurrency.

In March, Senate Minority Leader Aric Nesbitt (R-Lawton) – a 2026 candidate for governor – and Rep. Joseph Aragona (R-Clinton Township), the House's regulatory reform chair, announced they were creating the "Legislative Michigan Cryptocurrency and Financial Innovation Caucus."

Also, earlier this spring, President Donald Trump signed an executive order instructing the U.S. Treasurer to oversee the country's very own Bitcoin reserve, built out of cryptocurrency forfeited during criminal or civil asset forfeiture proceedings.

Sometimes data centers are used to mine crypto, containing the computer infrastructure used in the calculations that generate Bitcoin.

When asked if artificial intelligence and data centers could be types of economic development projects that she collaborates with the Trump White House on, Gov. Gretchen Whitmer said to MIRS on Monday "that could be something in there, yeah."

Another organization that presented to the Senate panel was CU WealthNext, working with credit unions in Michigan to utilize financial technology. Paul Fiore, the executive vice president of CU WealthNext, said there are more than 14 million digital assets in the world, with probably less than 100 not using Blockchain technology.

Blockchain technology operates through a network of multiple computers, without a traditional central authority that supervises transactions. Blockchain technology has been described as the foundation behind Bitcoin.

"In general, there needs to be oversight of each individual organization, so if it's an exchange, and they have a storage capability, or store crypto in cold storage or in other ways…they're reporting on exactly what they do and how they do it," Fiore said. "My personal belief is that there should be one regulatory agency, probably within one that already exists."

According to Security.org, an advice company for buying decisions, about 28 percent of American adults, or approximately 65 million people, own cryptocurrencies in 2025. Additionally, 46 percent of people in the United States, based on the data gathered, believe Trump will boost mainstream cryptocurrency adoption.