HOUSE BILL NO. 4511

A bill to prohibit the banning, provision of permitting or licensure requirements, or provision of other impairments of or for the holding of digital assets; to prohibit the advocacy or support through certain actions by certain state governmental officers and entities of a central bank digital currency by the United States government; to prohibit the imposition of prohibitions on the operation of certain nodes related to blockchain protocols, certain transfers of digital assets on blockchain protocols, or the participation in staking on certain blockchain protocols; to prohibit certain civil liability; and to provide for the powers and duties of certain state and local governmental officers and entities.

the people of the state of michigan enact:

Sec. 1. (1) Subject to provisions in the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, this state or any political subdivision of this state shall not do any of the following with regard to digital assets:

(a) Ban the holding of digital assets.

(b) Require a permit or license for the holding of digital assets.

(c) Impose any other impairment for the holding of digital assets.

(d) Impose any additional tax, withholding, assessment, or charge that is based solely on the use of the digital asset as the method of payment. This subdivision does not prohibit this state from imposing a tax, withholding, assessment, or charge that would otherwise be imposed if the transaction had taken place with United States legal tender.

(2) An agency or department of this state shall not advocate for or support, including by issuing a memorandum or official statement of support from the agency or department or its designees, the testing, adoption, or implementation of a central bank digital currency by the United States government.

(3) Subject to provisions in the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, this state or any political subdivision of this state shall not prohibit any of the following:

(a) The operation of a node for the purpose of connecting to a blockchain protocol or a protocol built on top of a blockchain protocol.

(b) The transfer of digital assets on a blockchain protocol.

(c) The participation in staking on a blockchain protocol.

(4) A person that only validates a transaction for digital asset mining, the operation of a node or series of nodes on a blockchain network, or the provision of digital asset mining or staking services for persons is not civilly liable.

(5) As used in this section:

(a) "Blockchain" means data that is shared across a network to create a ledger of verified transactions or information among network participants linked using cryptography to maintain the integrity of the ledger and to execute other functions, and distributed among network participants in an automated fashion to concurrently update network participants on the state of the ledger and any other functions.

(b) "Blockchain protocol" means any executable software deployed to a blockchain composed of source code that is publicly available and accessible, including a smart contract or any network of smart contracts.

(c) "Consensus mechanism" means a protocol or set of protocols that bring all nodes of a blockchain network into agreement to verify the state of a digital ledger.

(d) "Digital asset" means virtual currency, cryptocurrencies, and stablecoins.

(e) "Digital asset mining" means using electricity to power a computer or node for the purpose of securing a blockchain network.

(f) "Holding" means possession, including, but not limited to, electronic possession.

(g) "Node" means a computational device that contains and updates a copy of a blockchain.

(h) "Smart contract" means a self-executing contract or agreement that is stored on a blockchain network that executes automatically when the contract's conditions are met.

(i) "Staking" means using a node to lock digital assets in order to operate the consensus mechanism of a blockchain protocol.