House Bill 1042, introduced by Republican State Representative Kyle Pierce from Anderson, could make Indiana the first state to mandate cryptocurrency exposure in government-managed pension funds.
The bill was filed on December 2, 2025, and presented to the House Financial Institutions Committee on Thursday, December 5th. Unlike other states that simply allow crypto investments, Indiana’s approach requires them as standard options for public workers.
Mandatory Bitcoin Access for Public Workers
The legislation targets several major state retirement programs. Under HB 1042, administrators must include cryptocurrency exchange-traded funds as regular investment choices in the 529 education savings plan, the Hoosier START retirement program, and pension systems for teachers, public employees, and lawmakers.
The bill goes beyond basic access. It allows certain public pension funds to invest directly in crypto-linked ETFs. The state treasurer would gain new authority to place funds from specific accounts into stablecoin-based ETFs, expanding digital asset exposure across state finances.
Additional retirement systems would also get crypto options, including judges’ and prosecutors’ pension systems, law enforcement retirement programs, and other state benefit funds. However, these programs can choose whether to use the new investment authority.
Pierce designed the bill to give Indiana residents more financial flexibility as digital assets become mainstream. “Digital assets are quickly becoming part of everyday finances, and Indiana should be ready to engage in a smart, responsible way,” Pierce stated. He emphasized that the legislation balances investment choice with regulatory safeguards while exploring blockchain technology’s potential benefits.
Protecting Crypto Rights Statewide
HB 1042 extends far beyond retirement investments. The bill creates strong protections for digital asset users throughout Indiana by limiting local government power over cryptocurrency activities.
Cities and counties would be banned from passing rules that place unreasonable limits on digital assets when similar restrictions don’t apply to traditional finance. This protection covers crypto payments, private ownership of digital wallets, and mining operations.
The legislation specifically prevents local governments from imposing special fees or taxes on digital asset transactions that don’t apply to regular financial activities. Mining operations get particular attention – local authorities cannot ban crypto mining in industrial zones or prohibit private home mining under the same conditions allowed for other legal residential activities.
Self-custody rights receive strong legal protection under the bill. Private digital asset keys could only be demanded through court orders and only when no other legal method provides access to needed information. This provision shields crypto holders from government overreach while maintaining law enforcement capabilities when necessary.
Blockchain Innovation Through Government
The bill establishes a Blockchain and Digital Assets Task Force to study potential government and consumer applications of the technology. This group would evaluate use cases, consumer protection issues, tax considerations, and governance models for digital assets.
The task force would also recommend pilot projects across Indiana, potentially leading to broader blockchain adoption in state operations. This forward-looking approach positions Indiana to leverage emerging technologies while building expertise in digital asset management.
Pierce emphasized that the legislation creates guardrails while exploring how blockchain technology can benefit communities statewide. The task force structure allows for careful study and implementation rather than rushed adoption.
National Trend Toward State Bitcoin Reserves
Indiana’s bill arrives amid a nationwide wave of state-level cryptocurrency initiatives. While some states permit limited crypto investment flexibility, none currently mandate it like Indiana’s proposal.
Recent state actions show growing interest in digital assets. Michigan’s state retirement system tripled its Bitcoin ETF holdings to 300,000 shares worth about $11.4 million in the second quarter of 2025. Wisconsin’s state investment board disclosed over $387 million in Bitcoin ETF exposure.
Other states have taken different approaches. Oklahoma passed laws in 2024 protecting residents’ right to hold crypto in self-custody wallets and blocking special Bitcoin taxes. Kentucky followed by formally recognizing self-custody as a protected property right in 2025. Wyoming approved laws allowing public pension funds to invest in digital assets.
Arizona and Texas have introduced legislation for Bitcoin ETFs in retirement accounts. Florida outlined legal pathways for holding digital assets through ETFs in certain state funds. These efforts show growing bipartisan interest in cryptocurrency adoption at the state level.
States are also expanding digital asset use beyond investing. Ohio finalized plans to accept Bitcoin and other cryptocurrencies for official state payments in September. California updated its Unclaimed Property Law to ensure dormant crypto isn’t automatically converted to cash.
Legislative Timeline and Political Support
HB 1042 currently sits with the House Committee on Financial Institutions. Co-sponsors include Representatives Jake Teshka, Christopher Judy, and Heath VanNatter, showing Republican support for the initiative.
The state committee will not vote on the bill until January, giving lawmakers time to study the proposal’s implications. However, the early hearing signals that crypto policy is a top priority for Republican legislators, even as they juggle redistricting responsibilities.
The bill reflects broader political momentum behind cryptocurrency. Digital assets gained backing from major U.S. leaders, including President Donald Trump, and major financial institutions during the recent election cycle. Congress also passed its first major crypto bill earlier this year, creating a supportive federal environment.
Indiana’s approach differs from other states by making crypto ETF access a requirement rather than an option. This mandatory approach could accelerate adoption if successful, potentially influencing other states to follow similar paths.
The legislation comes as Bitcoin gains recognition as a store of value among government entities. Federal proposals have suggested using Bitcoin appreciation to help offset national debt through strategic reserve systems.
The Hoosier State’s Digital Future
Indiana’s House Bill 1042 represents a bold step toward cryptocurrency integration at the state level. By mandating Bitcoin options in public retirement plans while protecting digital asset rights, the legislation could establish Indiana as a leader in government crypto adoption.
The bill’s comprehensive approach addresses investment access, regulatory clarity, and innovation development through a single piece of legislation. Success could inspire similar mandatory approaches in other states, accelerating institutional cryptocurrency adoption nationwide.