Cryptocurrencies are a decentralized type of digital money that operate without the need for a third party, like a central bank, to monitor transactions. Blockchain refers to the secured database that keeps track of cryptocurrency exchanges.
The Senate Economic and Small Business Development Committee heard testimony on the proposal Thursday.
Senate Majority Leader Mike Shirkey (R-Clarklake) said cryptocurrencies’ possibilities for Michigan are broad.
“I can envision frankly, long-term, with a little bit of creativity, really changing the way Michigan is in terms of tax structure and competitiveness, both from a personal standpoint and a commercial or business standpoint,” Shirkey told the committee.
The commission would look at the viability and impact of using cryptocurrencies, like Bitcoin, in state government and business transactions.
Shirkey said suggestions could involve switching up tax or retirement policies.
“If we want to run the [cryptocurrency] adoption rate up, accelerate it so that Michigan is a leader here, let’s start doing things like letting people put a small portion of their — by voluntarily — a small portion of their pay in a bitcoin, they’ll naturally then become more inquisitive, they’ll naturally follow it, they’ll naturally ask more questions,” he said.
Shirkey added he hoped the commission would look at ways Michigan law could get out of the way of the cryptocurrency industry.
During the meeting, questions arose over the potential environmental impact of Michigan embracing bitcoin mining. That’s the often electricity-intensive process of computers working to unlock a Bitcoin code.
Some lawmakers on the committee floated possibilities like using farmland to create a more energy-efficient system for mining.
Bob Burnett runs a Bitcoin mining firm. He testified in support of the legislation. He said Michigan is well-set up to welcome the industry.
“You guys have a lot going for you here. Energy resources, you have great universities, you have the perfect climate, you have a lot of those things going for you. So, I think if you hang your banner out now, I think you will attract a lot,” Burnett said.
He said other states, like Texas and Wyoming, are already involved in supporting the cryptocurrency industry.
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