State Senator Chris Rose has launched laws to allow the West Virginia Treasury to diversify its holdings by together with digital belongings and treasured metals.
The Inflation Safety Act of 2025, submitted on Feb. 14, proposes permitting funding in digital belongings with a market capitalization exceeding $750 billion.
Presently, this is applicable solely to Bitcoin (BTC), with Ethereum’s (ETH) $328.3 billion market cap being greater than 50% beneath the mandated threshold.
The invoice would cap investments in digital belongings and treasured metals at 10% of whole treasury funds, providing flexibility to carry belongings both on-chain or by exchange-traded funds (ETFs).
Proponents argue that such diversification might present a hedge in opposition to inflation and financial instability, significantly as issues rise over the long-term affect of deficit spending at each state and federal ranges.
Rising pattern amongst states
West Virginia is amongst nearly two dozen US states which might be contemplating digital asset reserves as a technique to guard public funds from foreign money devaluation. The pattern started with Wyoming in 2024.
On Feb. 6, Utah’s Home of Representatives accredited an analogous invoice, which now awaits a Senate vote. If handed, it could authorize the state’s treasury to allocate funds into Bitcoin, high-value altcoins, and stablecoins, reflecting a broader acceptance of digital belongings as official reserve devices.
Kentucky launched laws the identical day to allow as much as 10% of state funds to be allotted to Bitcoin and different digital belongings. The transfer follows growing legislative curiosity in digital currencies instead retailer of worth amid issues over inflation and rising nationwide debt.
Michigan adopted swimsuit on Feb. 13, with Representatives Bryan Posthumus and Ron Robinson proposing a digital asset reserve invoice. In contrast to related measures in different states, the Michigan proposal doesn’t specify limitations on asset varieties, doubtlessly permitting for a broader vary of crypto investments.
Different states embrace Texas, Wyoming, North Dakota, North Carolina, South Dakota, Massachusetts, New Hampshire, Ohio, Pennsylvania, Maryland, Iowa, Arizona, Oklahoma, Tennessee and Wisconsin. In the meantime, lawmakers and regulators in a number of different states have known as for related legislative motion.
On the federal degree, President Donald Trump not too long ago directed a working group to discover the feasibility of a nationwide digital asset reserve as a part of an govt order signed final month.
The initiative has fueled hypothesis that particular person states might act forward of federal policymakers in integrating Bitcoin into authorities monetary methods, significantly because the regulatory panorama for digital belongings continues to evolve.
Potential financial implications
Analysts recommend that growing state-level adoption of Bitcoin reserves might drive further demand for digital belongings, doubtlessly influencing market costs and broader monetary market developments.
In response to a current evaluation by asset administration agency VanEck, states pursuing such laws might contribute as much as $23 billion in Bitcoin demand.
This pattern might also encourage larger institutional involvement within the digital asset house as state treasuries start treating Bitcoin as a official reserve asset alongside conventional shops of worth akin to gold.
As extra states pursue related initiatives, monetary consultants predict that legislative efforts to combine digital belongings into public funds will acquire additional traction. Nevertheless, critics warn that Bitcoin’s worth volatility might pose dangers to public treasuries, requiring cautious danger administration methods.
The West Virginia invoice will now proceed to committee assessment earlier than additional legislative consideration, with lawmakers and analysts carefully watching how the state navigates the challenges and alternatives of digital asset adoption.
