Indiana is moving closer to becoming one of the most supportive crypto states in the U.S., following a new proposal that could reshape institutional access to Bitcoin. House Bill 1042, introduced by state lawmakers, would permit state-managed retirement funds to invest in Bitcoin and other crypto-focused ETFs. This shift could significantly increase long-term institutional demand for Bitcoin if the bill moves forward.
The proposal also addresses broader crypto activity within the state. According to a report from IndyStar, the bill includes protections for digital payments and crypto mining operations. It gained notable attention due to being introduced during a planned redistricting session. Supporters argue that the legislation offers clear rules for businesses and investors while helping Indiana position itself within the expanding digital asset economy.
As discussions continue nationwide about crypto market structure bills, Indiana’s plan stands out. State-controlled funds such as the 529 education plan, public employee pensions, teachers’ retirement funds, and lawmakers’ pension plans would gain access to crypto ETFs—but not direct crypto purchases. Lawmakers view ETFs as safer, regulated instruments that avoid the risks tied to holding physical tokens.
Industry voices, including Michael Saylor, have suggested that privacy features can introduce regulatory concerns for Bitcoin, reinforcing the appeal of ETF-based exposure. Alongside investment access, the bill aims to protect miners. It prevents local governments from banning mining activity, ensures industrial zones remain open to mining firms, and introduces noise-related guidelines rather than restrictive limitations. Local agencies would also be barred from imposing special taxes or payment bans on Bitcoin or other crypto assets.
Rep. Kyle Pierce, the bill’s author, stated that the legislation will shape the direction of Indiana’s crypto policy in the coming years. He stressed that innovation can be supported without heavy restrictions. Meanwhile, retirement officials testified that they are neutral on the idea, noting limited current interest but acknowledging that ETF exposure could align with their existing investment strategies if appropriate risk warnings are added.
If passed, Indiana would join states like Texas and Wyoming in offering clear regulatory frameworks for crypto operations. Growing institutional involvement—highlighted recently by BlackRock’s $589 million purchase of Bitcoin and Ethereum—signals increasing confidence in the digital asset sector. Indiana’s bill could further accelerate this trend by expanding regulated access and strengthening industry support across the state.
