Indiana is moving closer to formally embedding crypto into its public financial system after lawmakers approved House Bill 1042, commonly referred to as the Bitcoin Rights Bill. The legislation has cleared both legislative chambers and now awaits the signature of Governor Mike Braun.
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If enacted, the law would allow certain public investment programs to provide exposure to crypto through regulated ETFs and establish legal protections for individuals who use or hold digital assets. The measure reflects a broader shift among U.S. states as they explore how crypto fits within traditional finance.
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Public Funds and Retirement Plans Open to Crypto ETFs
HB 1042 permits state-managed investment funds to include cryptocurrency ETFs as investment options rather than allowing direct token purchases. The approach aims to provide exposure through regulated financial products while maintaining oversight mechanisms.
Under the bill, several state-administered programs must offer self-directed brokerage accounts containing at least one digital asset investment option. These include retirement plans for teachers, public employees, and legislators, as well as the Hoosier START 529 education savings program.
Participation would remain voluntary, meaning individuals could choose whether to allocate funds toward crypto-related investments. Before rollout, the state must establish approved investment structures designed to manage compliance and risk oversight.
The legislation also allows eligible investment funds from outside Indiana to allocate assets into crypto ETFs under the state’s framework, potentially expanding institutional participation beyond state borders.
Legal Protections for Digital Asset Users
Beyond access to investment, the bill introduces protections for cryptocurrency users. Public agencies, with limited exceptions, would be restricted from banning or limiting lawful digital asset activities.
Residents would retain the right to accept crypto payments for legal goods and services and to store assets in self-custodied or hardware wallets. The proposal also prevents the state from imposing special taxes on crypto transactions and requires taxation rules to align with those applied to other financial activities.
Supporters argue that these provisions provide legal clarity for individuals and businesses operating in the digital asset space, while critics continue to highlight concerns about market volatility and retirement risk exposure.
Part of a Broader U.S. Policy Shift
Indiana’s move comes amid growing institutional interest in cryptos, following the expansion of crypto ETFs and evolving federal policy discussions on retirement portfolio diversification. Other states are considering similar measures, signaling a gradual shift toward incorporating digital assets into public finance structures.
HB 1042, introduced by State Representative Kyle Pierce, completed the legislative process after the House approved Senate amendments. If Governor Braun signs the bill, the law is scheduled to take effect on July 1, 2026, triggering implementation by state agencies and retirement administrators.
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As more states evaluate crypto-focused legislation, Indiana’s decision could serve as another trigger to the continued adoption of crypto in other states’ financial systems.
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