West Virginia has joined the growing list of U.S. states exploring crypto exposure at the treasury level, after a senior lawmaker introduced legislation that could allow public funds to be invested in Bitcoin and other approved digital assets.
Inflation Protection Act Targets Digital Assets
West Virginia State Senator Chris Rose has introduced a bill that would amend the state’s legal code to expand how public funds can be invested. The proposal, titled the Inflation Protection Act, would allow the state’s Board of Treasury to invest in precious metals, select digital assets, and regulated stablecoins.
Crucially, the bill limits digital asset exposure to cryptocurrencies with a market capitalization exceeding $750 billion in the previous calendar year. As of January, Bitcoin is the only asset that meets that threshold, meaning the legislation is effectively tailored to Bitcoin alone.
How the Treasury Could Hold Crypto
Under the bill’s framework, any digital assets acquired by West Virginia’s treasury could be held through qualified custodians, exchange-traded products, or secure custody solutions. This structure is designed to reduce operational and security risks while aligning with existing institutional investment practices.
Stablecoins are also included, but with strict guardrails. Any stablecoin investment would require explicit regulatory approval from either the U.S. federal government or individual state governments, ensuring that only compliant, fully vetted instruments are eligible.
A Growing Trend Among US States
West Virginia’s proposal mirrors a broader trend across the United States, where lawmakers increasingly view Bitcoin as a hedge against inflation and currency debasement. Throughout 2025, dozens of states floated similar ideas, though only Texas, Arizona, and New Hampshire ultimately passed laws authorizing state-level crypto reserves.
Supporters argue that limited exposure to Bitcoin can diversify public portfolios and protect purchasing power during periods of monetary instability. Critics, however, warn that crypto’s volatility makes it unsuitable for taxpayer-backed funds, even with strict allocation limits.
Political Hurdles Remain
For now, the fate of West Virginia’s bill remains uncertain. Lawmakers have referred the proposal to the Committee on Banking and Insurance, where it will face scrutiny over risk management, fiduciary responsibility, and long-term implications for public finances.
There has been no clear indication yet that the legislation has enough bipartisan support to advance through the full legislature. Analysts note that state-level crypto investment bills often face resistance from lawmakers concerned about price swings and regulatory uncertainty.
Introduced Amid Federal Crypto Gridlock
The timing of the proposal is notable. The West Virginia bill was introduced as lawmakers in Washington delayed progress on federal crypto regulation. The US Senate recently postponed a markup of the long-anticipated CLARITY Act, legislation aimed at defining digital asset market structure nationwide.
That bill has drawn sharp criticism from parts of the crypto industry, particularly over provisions affecting decentralized finance, stablecoin reward programs, and the expanded role of federal regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission.
States Move Faster Than Washington
As federal action stalls, states continue to experiment independently. Proposals like West Virginia’s highlight how crypto policy in the U.S. is increasingly being shaped at the state level, with lawmakers testing models that could later influence national standards.
If passed, the Inflation Protection Act would mark a symbolic shift for West Virginia, signaling openness to digital assets as part of a long-term financial strategy. Whether that vision becomes law now depends on legislative appetite for innovation-and tolerance for risk-in a rapidly evolving crypto landscape.
