Indiana has enacted a significant piece of cryptocurrency legislation, House Enrolled Act 1042 (HB1042), which has passed both the state House and Senate and now awaits the Governor's signature. The law establishes a formal legal definition for cryptocurrency within the state, describing it as a digital asset that operates without central control and uses encryption to create units and verify transfers. Notably, payment stablecoins are explicitly excluded from this definition.
The legislation introduces robust protections for crypto users. It safeguards the rights of residents to own, transact with, and self-custody cryptocurrencies like Bitcoin. A key provision bans discriminatory taxation, preventing digital assets from being singled out for harsher tax treatment compared to other financial assets.
Perhaps the most forward-looking component of the bill is its mandate for the state retirement system. The law requires the Indiana Public Retirement System (INPRS) board to offer at least one cryptocurrency investment option through a self-directed brokerage account by July 1, 2027. This marks a notable policy shift, opening state-managed retirement portfolios to digital asset exposure traditionally reserved for stocks and bonds.
State officials and lawmakers behind the bill state its purpose is to modernize financial regulations, provide regulatory clarity, and offer investors more choice as interest in digital assets grows. Supporters argue that clear rules encourage innovation and can attract blockchain businesses and investment to the state. If signed, Indiana will join a growing list of U.S. states crafting clearer legal frameworks for crypto, potentially influencing broader regulatory trends.
