Indiana Bill No. 1042 Lets Pensions Invest in Bitcoin Safely

A significant conversation is unfolding in Indiana regarding how pensions invest in Bitcoin, representing one of the most intriguing policy developments in the U.S. recently. This bill aims to integrate cryptocurrency exchange-traded funds (ETFs) as standard investment options for state pensions.

Indiana Bill No. 1042: Key Provisions

House Bill 1042 introduces crucial updates concerning state retirement and savings plans. It mandates that several major state retirement and savings plans must offer crypto ETFs. This includes plans for teachers, public workers, legislators, and 529 college savings plans, allowing everyday workers to select Bitcoin ETFs similarly to traditional stock or bond funds.

Furthermore, the bill empowers a broad range of pension funds to allocate portions of their assets to crypto ETFs. This marks the first instance of a U.S. state considering Bitcoin exposure as a regular component of public retirement planning. Additionally, the state treasurer is authorized to invest specific funds, such as trust pools and future-generation funds, in stablecoin-based ETFs, providing Indiana with both growth-oriented and stability-focused cryptocurrency investment avenues.

A substantial focus of the bill is on safeguarding personal freedom concerning digital assets. Under Bill 1042, local governments are prohibited from restricting crypto payments or self-custody wallets. They are also barred from imposing special fees or taxes on crypto payments unless these are applied equally to traditional transactions.

The bill also extends protections to crypto mining operations, permitting them in areas zoned for industrial use or within private residences. Local governments cannot enact specific noise regulations or zoning bans targeting miners. A stringent privacy rule is also included, stipulating that a court can only demand a private key if no other means exist to access the asset.

Indiana's Strategic Vision for Pension Investments in Bitcoin

In preparation for future digital asset integration, the bill establishes a “Blockchain and Digital Assets Task Force.” This task force will investigate blockchain use cases across government functions, consumer protection, tax regulations, and other areas. It will also propose concrete pilot projects for implementation in 2027.

Indiana Bill No. 1042 represents a significant stride toward enabling pensions to invest in Bitcoin while simultaneously safeguarding individual crypto users. If enacted, Indiana could establish itself as the first state to legally endorse Bitcoin investment, self-custody, and digital asset innovation comprehensively.