West Virginia Proposes Bitcoin Investment Bill

West Virginia lawmakers have introduced legislation that could fundamentally reshape the state's approach to public fund management. Senate Bill 143, introduced during the 2026 regular legislative session, proposes creating a new section of state law titled the "Inflation Protection Act of 2026."

The measure would authorize the state treasurer to allocate up to 10% of funds overseen by the Board of Treasury Investments into digital assets, precious metals, and regulated stablecoins. This marks a significant step toward integrating digital assets into state-level finance, positioning West Virginia at the forefront of a growing movement among U.S. states exploring cryptocurrency investments.

Introduced by Sen. Chris Rose, the bill would permit the Board of Treasury Investments to allocate up to 10% of funds it oversees into gold, silver, platinum, and certain digital assets, subject to existing investment rules. The proposed 10% cap applies at the time an investment is made. If asset prices rise and push the allocation above that threshold, the board would not be required to sell holdings, though it would be barred from making additional purchases until the allocation falls back below the limit.

The legislation outlines specific eligibility criteria for digital assets. To qualify for investment, a digital asset must have maintained an average market capitalization above $750 billion over the prior calendar year. This threshold currently limits eligibility to only Bitcoin, though the asset is not named directly in statute. The bill also allows investments in stablecoins that have received regulatory approval at either the federal or state level.

The purpose of this bill is to empower the Treasurer to invest in gold, silver, and bitcoin.

The proposed legislation includes detailed custody requirements for digital assets, addressing one of the most critical concerns for institutional investors. Holdings would need to be secured either directly by the West Virginia treasurer through a defined secure custody system, by a qualified third-party custodian, or through a registered exchange-traded product.

The bill outlines comprehensive standards for:

• Key control and access management
• Geographic redundancy for data and assets
• Robust access controls and audit protocols
• Disaster recovery planning and implementation

For precious metals investments, the bill allows holdings through exchange-traded products, qualified custodians, or direct physical possession by West Virginia. The legislation also permits cooperative custody arrangements with other states, subject to rules established by the treasurer.

Beyond simple holding, the bill would authorize the treasurer to pursue yield-generating activities with digital assets. This represents a proactive approach to asset management, allowing the state to potentially generate returns from its cryptocurrency holdings rather than relying solely on price appreciation.

Digital assets could be staked using third-party providers, provided that legal ownership remains with West Virginia. The treasurer could also loan digital assets under rules specifically designed to avoid adding financial risk to the state's portfolio. These provisions demonstrate the bill's comprehensive approach to treating digital assets as legitimate investment vehicles rather than speculative novelties.

While the bill expands investment options for general state funds, it imposes stricter limitations on West Virginia retirement systems. Under the proposal, retirement systems could invest only in exchange-traded products registered with federal or state regulators, rather than holding digital assets directly.

This distinction reflects a more conservative approach to retirement fund management, prioritizing regulatory oversight and established investment vehicles for long-term savings. The restriction acknowledges the unique fiduciary responsibilities associated with retirement funds while still allowing some exposure to the digital asset class through regulated channels.

The proposal reflects a growing interest among U.S. states in using Bitcoin and hard assets as long-term stores of value for public funds. West Virginia joins several other states that have explored or enacted similar measures allowing limited exposure to digital assets, though most have relied on exchange-traded products rather than direct custody.

Most recently, Rhode Island lawmakers reintroduced Senate Bill S2021, which would temporarily exempt small Bitcoin transactions from state income and capital gains taxes. Introduced January 9 by Senator Peter A. Appollonio, the bill was referred to the Senate Finance Committee and is framed as a pilot program to reduce tax friction for everyday Bitcoin use. This marks the second consecutive year Rhode Island legislators have proposed a targeted Bitcoin tax exemption.

West Virginia Senate Bill 143 has been referred to the Senate Committee on Banking and Insurance, with a subsequent referral to the Committee on Finance. The bill grants the treasurer authority to propose implementing rules, which would require legislative approval before taking effect.

The legislation represents a measured approach to digital asset integration, balancing innovation with regulatory safeguards. As Bitcoin currently trades at $95,494 with a market capitalization of $1.91 trillion, the timing reflects growing institutional acceptance of cryptocurrency as a legitimate asset class. The bill's progress will be closely watched by other states considering similar measures, potentially setting a precedent for how state governments can responsibly incorporate digital assets into their financial strategies.