Indiana lawmakers are taking a bold step toward embracing bitcoin. A new proposal would let the state invest in digital assets like Bitcoin through regulated funds while blocking local governments from restricting crypto companies.
The measure, House Bill 1042, reflects growing political and financial interest in crypto. Digital assets once seen as fringe now have backing from top U.S. leaders, including President Donald Trump, and major financial institutions.
Congress also passed its first major crypto bill earlier this year.
Indiana wants in. Lawmakers gave HB 1042 an early hearing as they juggle redistricting, signaling the issue is a top priority for Republicans.
“Digital assets are quickly becoming part of everyday finances, and Indiana should be ready to engage in a smart, responsible way,” said bill author Rep. Kyle Pierce, R-Anderson. “This bill gives Hoosiers more investment choices while establishing guardrails and helping us explore how blockchain and digital asset technology can benefit communities across our state.”
A cautious bitcoin and crypto approach
The Indiana bill would let public investment funds gain exposure to digital assets, but only indirectly. It does not allow direct crypto purchases.
Instead, it authorizes cryptocurrency exchange-traded funds, or ETFs. These funds track crypto prices and operate under federal oversight.
ETFs offer more stability than holding tokens directly, but risks remain. The SEC has warned that crypto markets still lack strong safeguards and are vulnerable to fraud and manipulation.
That concern surfaced in testimony from Tony Green, deputy executive director of the Indiana Public Retirement System. He said INPRS was neutral on the bill but would want clear disclaimers about volatility. He also noted members have shown little interest in crypto options.
Under the bill, several major programs in Indiana must offer at least one crypto ETF. That list includes the 529 education savings plan, the Hoosier START plan, and retirement systems for teachers, public employees, and lawmakers.
Other state funds would also gain authority to invest in crypto ETFs. The state treasurer could place assets in stablecoin ETFs as well.
Guardrails and a task force
The bill goes beyond investments. It would restrict how Indiana state agencies and local governments regulate digital assets. Pierce said the aim is fairness. The measure bars local rules that target crypto use, mining operations, or self-custody.
It also protects private keys as privileged information.
The proposal creates a Blockchain and Digital Assets Task Force. The group would study potential government and consumer uses of the technology. It would also recommend pilot projects across the state.
Bitcoin is a national trend
States are increasingly exploring crypto in pension funds and public accounts. The push comes as Bitcoin gains traction as a potential store of value for governments. Some federal proposals have even floated using Bitcoin reserves to offset national debt.
Last week, Texas became the first U.S. state to purchase Bitcoin through a spot ETF, buying $5 million worth via BlackRock’s iShares Bitcoin Trust, according to Texas Blockchain Council President Lee Bratcher.
The acquisition is the state’s first move under its new Strategic Bitcoin Reserve, created by legislation signed in June.
Texas plans to eventually self-custody its BTC but used IBIT for the initial allocation while the procurement process continues. The purchase highlights rising state and institutional interest in Bitcoin as a reserve asset.
Harvard University recently tripled its IBIT holdings to $442.8 million, while Emory University and Abu Dhabi’s Al Warda Investments have also boosted exposure.
Texas had previously explored a Bitcoin reserve proposal that called for cold storage, resident donations, and annual audits.
Meanwhile, New Hampshire approved a $100 million Bitcoin-backed municipal bond, the first of its kind globally, requiring borrowers to over-collateralize with BTC.
At the time of writing, the bitcoin price is flirting with $90,000.
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