Legislative Proposal to Integrate Digital Assets into State Retirement Programs
A new legislative proposal is aiming to make one of the United States’ most traditional public-sector systems, state-run pensions and savings programs, a gateway for Bitcoin and crypto investment exposure.
House Bill 1042, introduced during a Financial Institutions Committee meeting on Dec. 4, would require several public retirement programs in Indiana and savings plans to offer cryptocurrency exchange-traded funds (ETFs) as regular investment options.
The bill also expands investment authority for certain pension funds, allowing them to hold cryptocurrency ETFs directly, and permits the state treasurer to allocate portions of designated funds into stablecoin ETFs.
Rationale for Digital Asset Integration
"Digital assets are quickly becoming part of everyday finances, and Indiana should be ready to engage in a smart, responsible way," said Rep. Kyle Pierce, the sponsor of HB 1042. "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."
The bill's announcement emphasized the goal of expanding consumer choice while preparing the state for rapid changes in financial infrastructure.
Scope of Investment Expansion
The bill's investment component is sweeping and covers several key public programs:
- •The legislators’ defined contribution plan
- •The public employees’ retirement hybrid and MyChoice plans
- •Teachers' retirement hybrid and MyChoice plans (including legacy pre-1996 accounts)
- •The Hoosier START plan
- •The 529 Education Savings Plan
Under HB 1042, all these plans must offer at least one cryptocurrency ETF option.
Separately, multiple pension funds, including law-enforcement, judges, and public-employee retirement systems, would be authorized to invest assets directly into crypto ETFs under updated investment rules.
Enhanced Protections for Crypto Activities
HB 1042 also establishes a digital-assets framework limiting how local governments may regulate crypto-related activity.
According to Pierce’s office, the bill includes provisions that prevent municipalities from adopting rules that:
- •"Unreasonably restrict digital asset payments, custody or mining when comparable traditional financial activities are permitted"
- •Impose special fees or taxes on digital-asset transactions not applied to similar non-crypto transactions
- •Ban digital-asset mining in industrial zones or prohibit private home mining under conditions allowed for other legal residential activities
The legislation also includes a privacy safeguard prohibiting courts from compelling disclosure of private wallet keys unless "no other admissible information can provide access."
Establishment of a Blockchain Task Force
Beyond investment access, HB 1042 commissions a statewide Blockchain and Digital Assets Task Force.
The group would evaluate government use cases, consumer protection issues, tax and accounting considerations, and digital-asset governance models.
By late 2026, the task force must recommend legislation for up to two state or local blockchain pilot programs.
Other States Exploring Crypto for Pension Systems
Indiana is not the only state exploring the integration of cryptocurrency into its financial systems.
Lawmakers in North Carolina introduced a measure directing the state treasurer to examine whether Bitcoin could be added to the $108 billion North Carolina Retirement Systems, framing BTC as a potential long-term inflation hedge for pension savers.
A proposal in the state House pushed to let the Florida Retirement System, one of the largest public pensions in the country, gain limited exposure to Bitcoin and Ethereum ETFs. The effort ultimately stalled but marked one of the earliest large-scale attempts to connect pensions with crypto markets.
In Michigan, a bipartisan group of legislators introduced a plan to allow public-employee pension funds to allocate a small portion to spot Bitcoin ETFs, responding to union requests for broader investment options outside traditional assets.