Michigan could have its own cryptocurrency backed by the state’s gold and silver reserves, following a proposal from lawmakers.

Legislation introduced late last month would create a new digital currency called “Michcoin” that bill sponsor state Rep. Alabas Farhat, D-Dearborn, said would give Michiganders a stable and secure alternative to traditional fiat currencies, like the dollar.

The cryptocurrency would be backed by the state’s gold and silver reserves, which under the bill would be stored and managed by a newly created Michigan bullion depository to ensure Michcoin is fully backed by physical assets, Farhat said.

“Michcoin represents a bold step toward financial security and innovation,” he said Thursday, December 12. “This initiative will not only strengthen our state’s economic resilience, but also provide Michigan residents with a reliable, precious metals-backed alternative to traditional currency.”

The bill, presented on November 26, has not yet received a first hearing in the House.

Farhat was participating in caucus meetings Thursday afternoon and could not immediately be reached for comment on how he envisions Michiganders using the proposed cryptocurrency.

Michcoin would not be the state’s first investment in cryptocurrency, which this year reached a record market capitalization and saw Bitcoin, the leading cryptocurrency by market capitalization, reach new highs of just more than $100,000.

According to cryptocurrency news site CointelegraphThe Michigan State Retirement System revealed this year that it held about $18 million in shares of two cryptocurrency funds holding Bitcoin and Ethereum, which have the second-highest market capitalization.

The state pension fund’s shares in the Bitcoin fund have increased by about $1 million since June 30, according to Cointelegraph.

However, these investments represent only a small part of the total value of the public pension fund portfolio, what financial services analytics firm Fintel reports is estimated at around $20.2 billion.

Next year, Detroit is expected to become the largest city in the United States. accept crypto as payment for taxes and other municipal fees.

The Michigan Department of Licensing and Regulatory Affairs warned residents to be careful before diving into cryptocurrencies and crypto-related investments out of fear of schemes, volatility and minimal regulatory oversight.

“Investing in cryptocurrencies and associated financial products must therefore be seen for what it is: an extremely risky speculation with a high risk of loss,” the department states.

A second bill presented by Farhat would include depot security officers in the definition of “law enforcement officer” under the Michigan Commission on Law Enforcement Standards Act.

This means that the training and licensing standards that apply to law enforcement officers would also generally apply to security officers at the proposed Michigan Bullion Depository. Farhat said the move would ensure the highest standards of safety and accountability.

“The depository will be a model of transparency and trust – ensuring its security is paramount,” Farhat said.