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 businesses.
The measure, House Bill 1042, reflects growing political and economic interest in crypto. Digital assets, once seen as fringes, now have the backing of top US 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 while juggling redistricting, signaling the issue is a top priority for Republicans.
“Digital assets are quickly becoming part of the everyday economy, and Indiana should be ready to engage in a smart and responsible way,” said law author Kyle Pierce, R-Anderson. “This bill gives Hoosiers more investment choices while establishing roadblocks and helping us explore how blockchain and digital asset technology can benefit communities across our state.”
A cautious approach to bitcoin and crypto
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 director of the Indiana Public Retirement System. He said INPRS was neutral on the bill but wanted clear disclaimers about volatility. He also noted that members have shown little interest in crypto opportunities.
According to the bill, several large programs in Indiana must offer at least one crypto ETF. This list includes the 529 education savings plan, the Hoosier START plan, and retirement systems for teachers, public employees, and legislators.
Other sovereign wealth funds will also be authorized to invest in crypto ETFs. The Treasury could also place assets in stablecoin ETFs.
Traffic police and a task force
The bill goes beyond investments. It would limit how Indiana state agencies and local governments regulate digital assets. Pierce said the goal is justice. The measure bars local regulations that target crypto use, mining or self-storage.
It also protects private keys as privileged information.
The proposal creates a Blockchain and Digital Assets Task Force. The group will examine potential government and consumer applications of the technology. It will 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 US state to buy Bitcoin through a spot ETF, buying $5 million worth through BlackRock’s iShares Bitcoin Trust, according to Texas Blockchain Council President Lee Bratcher.
The purchase is the state’s first move under its new strategic bitcoin reserve, created by legislation signed in June.
Texas plans to eventually handle its BTC itself, but used IBIT for the initial allocation while the procurement process continues. The purchase highlights the growing governmental 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 increased 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 worldwide that requires borrowers to convince with BTC.
At the time of writing, the bitcoin price is flirting with $90,000.