West Virginia State Senator Chris Rose has introduced legislation, dubbed the "Inflation Protection Act," which seeks to amend the state's financial code to permit the state treasury to invest a portion of its reserves in alternative assets. The bill would authorize the West Virginia Board of Treasury to allocate up to 10% of state funds into precious metals, specific digital assets, and approved stablecoins as a hedge against inflation.
The proposal sets strict eligibility criteria. For digital assets, it stipulates that only those with a market capitalization exceeding $750 billion from the previous calendar year would qualify. As of January 2026, Bitcoin (BTC) is the only cryptocurrency that meets this threshold. Any stablecoins acquired by the treasury would need to have received regulatory approval from either the U.S. federal government or individual state governments.
The bill outlines permissible custody methods for these assets. Digital assets could be held by a qualified custodian, through an exchange-traded product, or via a secure custody solution meeting institutional standards.
This move by West Virginia reflects a broader trend among U.S. states. While several states proposed similar legislation in 2025, only Texas, Arizona, and New Hampshire have successfully passed laws allowing state-level cryptocurrency reserves. The West Virginia bill has been referred to the Committee on Banking and Insurance for review, and its prospects for passage remain uncertain as of mid-January 2026.
The state-level initiative comes amid stalled progress on federal digital asset regulation. The U.S. Senate recently postponed a markup for the comprehensive CLARITY Act, legislation intended to establish a national market structure for digital assets, leaving states to navigate their own regulatory paths.
