West Virginia Introduces Bitcoin Reserve Fund Legislation: A Step Toward Digital Asset Adoption

Introduction to the Bitcoin Reserve Fund Proposal

West Virginia has joined the growing list of states in the United States exploring the adoption of digital assets as part of their financial strategy. On February 14, State Senator Chris Rose introduced the Inflation Protection Act of 2025, legislation designed to create a “Bitcoin reserve fund.” If passed, this bill would empower the state treasurer to stake or loan West Virginia’s digital asset holdings. This move aligns with a broader national trend, as West Virginia becomes the 23rd state to propose such a fund. The bill is part of a larger effort to diversify state investments and protect against inflation by incorporating digital assets into the state’s financial portfolio.

Key Provisions of the Inflation Protection Act

The proposed legislation allows the Board of Treasury Investments of West Virginia to allocate up to 10% of public funds in its account to invest in precious metals, digital assets, or stablecoins. Specifically, the bill highlights that digital assets must have a market capitalization exceeding $750 billion or be U.S.-regulated stablecoins. While Bitcoin is not explicitly mentioned in the bill, it is currently the only digital asset that meets these criteria. This makes Bitcoin the primary candidate for inclusion in the fund. The bill also stipulates that if the proportion of digital assets or precious metals in the portfolio exceeds 10%, no further investments in these categories will be allowed until the proportion falls below the threshold.

Bitcoin’s Role in the Fund

Although Bitcoin is not directly named in the bill, it is the only digital asset that currently satisfies the market capitalization requirement. This positions Bitcoin as a central component of West Virginia’s proposed reserve fund. The bill also addresses how digital assets can be held, offering flexibility by allowing them to be stored in the custody of the treasurer, a third-party provider, or in the form of an exchange-traded product. This versatility ensures that the state can manage its digital assets in a way that aligns with its financial goals and risk tolerance.

Staking and Loaning Digital Assets

One of the unique aspects of the bill is the provision allowing the state treasurer to stake or loan digital assets, provided it does not increase the state’s financial risk. For Bitcoin, this is particularly notable, as its proof-of-work consensus mechanism does not support traditional staking. However, Bitcoin can be utilized in wrapped form or through staking pools, offering potential avenues for the state to generate returns on its holdings. This feature makes the bill forward-thinking, as it explores ways to maximize the value of digital assets while managing risk.

Legislative Progress and Support

The bill has been referred to the West Virginia Senate’s Committee on Banking and Insurance, where it will undergo scrutiny before potentially advancing to the Committee on Finance. Senator Chris Rose, a newly elected official with a conservative platform, has been a vocal supporter of President Donald Trump and has sponsored several bills since taking office. His sponsorship of this legislation reflects his interest in innovative financial strategies and his alignment with a growing movement of lawmakers exploring digital assets as part of state investments.

National Momentum for Digital Asset Adoption

West Virginia’s proposal is part of a nationwide trend, with other states like Georgia and Utah also advancing similar legislation. Georgia’s bill explicitly names Bitcoin as the digital asset for state investment, while Utah’s Blockchain and Digital Innovation Amendments have already passed the state house and are under consideration in the senate. These efforts demonstrate a growing recognition of the potential for digital assets to play a role in modern financial systems. As more states explore reserve funds and investment strategies involving Bitcoin and other digital assets, this movement signals a significant shift toward mainstream adoption of cryptocurrencies in the United States.