Indiana Bill Proposes Allowing State Pensions to Invest in Crypto ETFs

- The bill, sponsored by Republican State Representative Kyle Pierce, would not involve the state directly purchasing cryptocurrency. Instead, it would require certain state-managed retirement plans to offer at least one cryptocurrency ETF as an investment option through self-directed brokerage accounts, giving individual employees the choice to invest. - As of February 20, 2026, HB 1042 has passed the Indiana Senate with amendments and has been returned to the House for further consideration. The bill, if enacted, would have an effective date of July 1, 2026. - An earlier version of the bill included a provision for the state to directly invest public retirement assets into crypto ETFs, but this was removed by a Senate committee. The focus of the current bill is on individual choice rather than state-managed investment. - The Indiana Public Retirement System (INPRS), which manages approximately $55 billion in assets, has taken a neutral stance on the bill. - The legislation also includes broader "crypto-friendly" provisions that would prevent local governments in Indiana from prohibiting or restricting the use of cryptocurrency for payments, crypto mining operations in industrially zoned areas, or the self-custody of digital assets. - While the bill allows for investment in cryptocurrency ETFs, it explicitly excludes funds that are primarily tied to stablecoins. - A provision to create a "Blockchain and Digital Assets Task Force" to study and recommend pilot programs for blockchain technology in the state was part of the initial bill but was reportedly removed during the amendment process. - The bill covers a wide range of state-managed plans, including those for public employees, teachers, state legislators, and the Hoosier START plan.