Bill Overview
Indiana has introduced a groundbreaking bill aimed at mandating Bitcoin investment options in public retirement programs and protecting residents’ rights to use and hold digital assets. The proposal, known as House Bill 1042, was filed by State Representative Kyle Pierce and presented during a meeting of the House Financial Institutions Committee.
Investment Provisions
The bill focuses on providing public workers with access to cryptocurrency investments while establishing clear legal boundaries for digital asset use, custody, payments, and mining. If passed, administrators of state‑run retirement and savings plans would be required to include cryptocurrency exchange‑traded funds (ETFs) as standard investment choices. Certain public pension funds would be permitted to invest directly in crypto‑linked ETFs, and the state treasurer would have the authority to place funds from specific accounts into stablecoin‑based ETFs.
Representative Pierce emphasized that the bill aims to give Indiana residents more financial flexibility as digital assets become increasingly integrated into the broader economy. The legislation is designed to balance investment choice with regulatory safeguards while allowing the state to explore potential government use of blockchain technology through pilot programs.
Local Regulation Protections
Beyond retirement investing, the bill addresses local regulation by prohibiting cities and counties from imposing “unreasonable” limits on digital assets if similar rules do not apply to traditional financial activities. This protection extends to crypto payments, private ownership of digital wallets, and mining operations.
The proposal includes safeguards for self‑custody, stating that private digital asset keys can only be demanded through a court order and only when no other legal method of access is available. It also prevents local governments from zoning out mining facilities from industrial zones and protects properly zoned residential mining activity.
National Context
If enacted, Indiana would become the first state in the country to require publicly managed retirement programs to provide Bitcoin exposure as a standard option. While some states permit limited crypto investment flexibility, none currently mandate it.
Other states have taken related but narrower steps. For example, Oklahoma passed a law protecting residents’ right to hold crypto in self‑custody wallets and blocking special taxes on Bitcoin transactions. Kentucky formally recognized self‑custody as a protected property right, and Wyoming has approved laws allowing public pension funds to invest in digital assets. Nationwide momentum around crypto‑linked retirement exposure continues to build. Michigan’s state retirement system recently tripled its Bitcoin ETF holdings, and Wisconsin’s state investment board has disclosed significant Bitcoin ETF exposure.
States are also expanding their use of digital assets beyond investing. Ohio has finalized plans to accept Bitcoin and other cryptocurrencies for official state payments, and California has updated its Unclaimed Property Law to protect dormant crypto from being automatically converted into cash. New York City has established a municipal Office of Digital Assets and Blockchain to coordinate crypto policy and encourage blockchain development. At the federal level, broader regulatory efforts are underway, including updated guidance on 401(k) crypto exposure expected in 2026.
Conclusion
Indiana’s proposed bill represents a significant step towards integrating digital assets into public retirement programs and protecting residents’ crypto rights. If passed, it could set a precedent for other states to follow, further legitimizing cryptocurrency as a mainstream investment option.
