Indiana passes legislation opening public pension plans to Bitcoin and safeguarding individual rights over digital assets.
The State of Indiana has taken another step toward integrating digital assets into the traditional financial system. The state legislature has approved a bill that expands investment opportunities in bitcoin and other digital assets for public pension funds, while also ensuring protections for citizens who use cryptocurrencies.
On February 25, House Bill 1042, titled “Regulation and Investment of Cryptocurrencies,” received bicameral approval after the House adopted amendments proposed by the Senate. The measure now awaits only the governor’s final signature to become law.
What HB 1042 provides
The bill, introduced by Representative Kyle Pierce, requires state-managed pension and savings plans to offer participants a self-directed brokerage account that includes at least one digital asset investment option.
Programs affected by the reform include the defined contribution plan for legislators, the Hoosier START college savings program, as well as pension funds for public employees and teachers. This change will allow thousands of Indiana workers and public officials to diversify their retirement portfolios by including bitcoin and other digital assets.
HB 1042 goes beyond expanding institutional investment options. The measure also introduces safeguards for the individual rights of Indiana residents in their use of digital assets.
The law prohibits state public agencies—except for the Department of Financial Institutions—from enforcing regulations that restrict personal use of digital assets. In particular, no agency may prohibit or limit citizens’ ability to accept digital assets as payment for lawful goods and services or to hold assets in non-custodial wallets or hardware wallets.
Another key provision concerns tax treatment. The bill explicitly prohibits the State from imposing special taxes on cryptocurrency-related activities that do not also apply to other traditional financial transactions. This clause ensures equal tax treatment between Bitcoin transactions and those conducted in fiat currency, removing potential discriminatory barriers that could discourage crypto adoption within the state.
With bicameral approval secured, HB 1042 is now on the desk of Indiana Governor Mike Braun. If signed, the law’s provisions will take effect on July 1, 2026.
