Indiana Bill Proposes Bitcoin Mandate in Pensions and Protects Self-Custody Rights

A newly proposed bill in Indiana aims to require public retirement programs to integrate Bitcoin investment options. Additionally, it seeks to restrict the power of local governments in regulating the use of digital assets.

Key Takeaways

Indiana is introducing a bill requiring public retirement programs to offer Bitcoin investment options.
The legislation aims to limit local government regulations on digital assets.
If enacted, Indiana would be the first state to make such a requirement mandatory for pension programs.
Other states are also expanding cryptocurrency access in various ways, though none have implemented a similar mandate.

This article sheds light on the evolving landscape of cryptocurrency regulations across the U.S., particularly focusing on Indiana's bold legislative move that seeks to advance financial options for public workers through Bitcoin investments.

Indiana Bill Proposes Bitcoin Mandate in Pensions and Protects Self-Custody Rights

Filed by State Representative Kyle Pierce, a Republican from Anderson, this legislation, known as House Bill 1042, was introduced during a meeting of the House Financial Institutions Committee.

The bill's main objective is to provide public workers with opportunities to invest in cryptocurrencies while establishing clear legal guidelines regarding the use, custody, payments, and mining of digital assets.

Indiana's Ambitious Plan for Bitcoin in Public Pension Funds

Under the proposed legislation, administrators of various state-run retirement and savings programs would need to offer cryptocurrency exchange-traded funds (ETFs) as standard investment options.

Moreover, it would allow certain public pension funds to invest directly in cryptocurrencies linked to ETFs and authorize the state treasurer to allocate funds from specific accounts into stablecoin-based ETFs.

Pierce expressed that the bill is tailored to enhance financial flexibility for Indiana residents as digital assets increasingly play a significant role in the economy.

He mentioned that the proposal aims to strike a balance between investment opportunities and regulatory precautions while enabling the state to examine potential government applications of blockchain technology through pilot programs.

Crypto Integration

The legislation also addresses local regulations, prohibiting cities and counties from implementing rules that impose "unreasonable" limits on digital assets unless similar restrictions apply to traditional financial activities.

This includes protective measures for crypto payments, individual ownership of digital wallets, and mining operations.

To enhance self-custody protections, the bill stipulates that private digital asset keys can only be requested via a court order, and only after all other legal avenues for access have been exhausted.

Additionally, it would prevent local governments from excluding mining facilities from industrial areas and safeguard appropriately designated residential mining operations.

If passed, Indiana would pioneer as the first state to necessitate that publicly managed retirement programs include Bitcoin as a standard investment choice. While some states allow limited crypto investment options, none currently enforce a mandate.

Expanding Cryptocurrency Access in Other States

In contrast, other states have implemented similar initiatives but on a smaller scale. For instance, Oklahoma enacted a law in 2024 to safeguard residents' rights to self-custody crypto wallets and prevent special taxes on Bitcoin transactions.

Kentucky followed suit in 2025 by officially recognizing self-custody as a protected property right. Wyoming has also passed legislation permitting public pension funds to invest in digital assets.

Additionally, Arizona has proposed a law to enable Bitcoin ETFs in retirement accounts, while Florida presented legal avenues for holding digital assets through ETFs in specific state funds.

Indiana's initiative stands out by making access to crypto ETFs a requirement rather than simply an option.

The push for crypto-related retirement investments is gaining momentum statewide. In August, Michigan’s state retirement system increased its Bitcoin ETF holdings to 300,000 shares, valued at approximately $11.4 million, according to regulatory filings.

The fund also holds about $13.6 million in Ethereum through the Grayscale Ethereum Trust. Similarly, Wisconsin's state investment board has revealed over $387 million in Bitcoin ETF exposure.

States are also exploring the use of digital assets beyond investment. In September, Ohio finalized its plan to accept Bitcoin and other cryptocurrencies for official state payments.

In October, California updated its Unclaimed Property Law to ensure that dormant crypto is not automatically converted to cash when it is transferred to state custody.

New York City has set up a municipal Office of Digital Assets and Blockchain, a step following an executive order from Mayor Eric Adams aimed at harmonizing crypto policy and promoting blockchain development.

At the national level, regulatory efforts are intensifying as lawmakers prepare new frameworks that may influence how states formulate crypto policies, with updated guidance on 401(k) crypto exposure expected by 2026.