Indiana Legislature Advances Bill to Add Cryptocurrency to Public Retirement Plans

Indiana House Bill 1042: Scope and Retirement Plan Changes

House Bill 1042, titled “Regulation and investment of cryptocurrency,” received bicameral approval after the Indiana House concurred with amendments made by the Senate on Wednesday. The legislation was introduced by Representative Kyle Pierce.

The bill requires specified state-administered retirement and savings plans to offer participants a self-directed brokerage account that includes at least one cryptocurrency investment option. The affected plans include:

– The legislators' defined contribution plan
– The Hoosier START college savings program
– Specified plans under the public employees' retirement fund
– Specified plans under the teachers' retirement fund

If signed into law, these changes will apply from July 1, 2026.

Protections for Individual Digital Asset Use and Tax Treatment

HB 1042 also addresses how public agencies in Indiana may regulate the use of digital assets. With the exception of the Department of Financial Institutions, public agencies would be barred from enforcing rules that limit individuals’ use of digital assets.

Under the bill, agencies may not prohibit or restrict a person’s ability to accept cryptocurrency as payment for legal goods and services. They also may not restrict individuals from holding digital assets in self-hosted or hardware wallets.

In addition, the legislation prohibits the state from imposing special taxes on cryptocurrency activities that do not apply to other financial transactions. This provision is intended to ensure that crypto-related activities are not subject to tax treatment distinct from comparable financial transactions.

HB 1042’s advancement is described as aligning with a broader national movement to integrate bitcoin and other digital assets into the legacy financial system, while safeguarding the rights of individual holders. The bill now awaits Governor Mike Braun’s decision. Last August, President Donald Trump signed an executive order to allow 401(k) retirement plans to include crypto, reflecting the same broader trend cited in connection with the Indiana measure.

FAQ

What is House Bill 1042?
House Bill 1042 is Indiana legislation titled “Regulation and investment of cryptocurrency” that mandates certain state-administered retirement and savings plans to offer at least one cryptocurrency investment option and limits the ability of most public agencies to restrict individual use of digital assets.

Which retirement and savings plans are affected?
The bill applies to the legislators' defined contribution plan, the Hoosier START college savings program, and specified plans under the public employees' retirement fund and the teachers' retirement fund.

How does the bill address individual use of cryptocurrencies?
HB 1042 prohibits most public agencies from restricting individuals from accepting cryptocurrency as payment for legal goods and services or from holding digital assets in self-hosted or hardware wallets.

When would the bill take effect if signed?
If signed by Governor Mike Braun, the provisions of HB 1042 would take effect on July 1, 2026.