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An Indiana Senate committee has advanced House Bill 1042 by a 6-2 party-line vote, moving the state closer to allowing participants in defined contribution public pension plans to access cryptocurrency ETFs through self-directed accounts, a measure that could affect how workers invest within Indiana’s $55 billion public retirement system.
Indiana crypto bill cleared committee in a 6-2 vote along party lines on February 11, 2026, signaling growing legislative support for structured crypto exposure while maintaining guardrails for public funds.
At the heart of the Indiana crypto bills is a targeted approach. The legislation allows only participants in defined contribution plans to access crypto-related ETFs through self-directed brokerage accounts.
Rep. Kyle Pierce (R-Anderson), the bill’s author, clarified that participants in eligible plans do not directly control how base pension investments are managed by the state.
Instead, the Indiana crypto billing ensures that only those enrolled in defined contribution structures—such as Hoosier START—can opt into crypto exposure.
Pierce stressed that the proposal focuses on individual choice. “The proposed amendments to HB1042 will offer individual choice rather than the plans in which the state handles investment decisions,” he explained during committee discussions.
If enacted, the Indiana crypto bill would require public employee plans like Hoosier START to offer self-directed brokerage accounts beginning July 1, 2026.
Beyond pensions, the Indiana crypto billing contains sweeping protections for crypto-related activity across the state.
The legislation would prohibit local governments—except the Indiana Department of Financial Institutions—from restricting lawful crypto transactions for services.
It would also prevent municipalities from banning digital asset mining businesses operating in industrial-zoned areas.
State agencies would be barred from stopping digital mining companies, including data centers, from operating in appropriately zoned districts.
Additionally, individual “Hoosiers” would retain the right to mine crypto from their homes.
Sen. Scott Baldwin (R-Noblesville), chair of the Tax and Fiscal Policy, Insurance and Financial Institutions Committee, underscored the state’s pro-business posture.
“We’re never in the business of putting anybody out of business. That’s not our goal here, in the state of Indiana,” Baldwin said during the hearing.
Supporters argue the Indiana crypto billing sends a clear signal that the state wants to attract blockchain innovation and digital infrastructure investment.
While the Indiana crypto bill allows exposure to crypto ETFs, it draws a firm line around stablecoins.
Under the updated language, pension investments cannot be directed toward funds primarily tied to stablecoins.
Lawmakers say this filter ensures retirement exposure remains linked to market-traded crypto assets rather than dollar-pegged tokens.
Supporters contend that ETF-based exposure provides regulated market access without the operational and custody risks associated with directly holding digital tokens.
Importantly, the Indiana crypto billing does not authorize the state itself to purchase cryptocurrencies outright.
Instead, employees may allocate a portion of their retirement savings—based on personal risk tolerance—into approved crypto-related products through brokerage windows.
Despite its advancement, the crypto bill is not without critics—even among its supporters.
Rep. Pierce acknowledged the legislation “needs more work this year,” pointing out unresolved issues and emphasizing that some aspects of the product are not performing as well as expected.
During committee deliberations, lawmakers discussed amendments that would have stripped certain provisions.
However, Sen. Baldwin ultimately chose not to call the amendment for a vote, signaling confidence in the current framework while leaving room for adjustments during second reading.
The Indiana crypto bill now heads to the full Senate for consideration. If passed, it is scheduled to take effect on July 1, 2026.
The stakes are significant. The Indiana Public Retirement System oversees more than $55 billion in public pension assets.
Even limited crypto exposure through ETFs could represent a symbolic shift in how conservative state-managed funds approach digital assets.
Supporters frame the Indiana crypto bill as a modernization effort that aligns retirement options with evolving financial markets.
Critics, however, question whether volatile crypto-linked products belong in retirement accounts, even within defined contribution frameworks.
The Indiana crypto bill reflects a broader trend among U.S. states exploring crypto integration within regulated frameworks rather than outright bans.
By protecting mining operations, preventing local transaction restrictions, and permitting ETF-based pension exposure—while excluding stablecoin-dominated funds—Indiana lawmakers are attempting a calibrated approach.
The coming Senate debate will determine whether the crypto bill becomes law or undergoes further revisions.
For now, Indiana has positioned itself at the center of a national conversation over how public pensions, digital mining, and crypto ETFs intersect.
One thing is certain: the Indiana bill has transformed from a niche proposal into a high-stakes policy shift with long-term implications for public retirement systems and blockchain innovation in the Hoosier State.
