Indiana Bill Would Mandate Bitcoin In Pensions And Shield Self-Custody Rights

What Happened

A newly introduced bill in Indiana would require public retirement programs to offer Bitcoin-related investment options and would also limit how much power local governments have to restrict the use of digital assets.

The proposal was filed on Thursday by State Representative Kyle Pierce, a Republican from Anderson. Known as House Bill 1042, the legislation was presented during a meeting of the House Financial Institutions Committee.

It focuses on giving public workers access to cryptocurrency investments while setting clear legal boundaries around digital asset use, custody, payments, and mining.

Under the bill, administrators of several state-run retirement and savings plans would be required to include cryptocurrency exchange-traded funds as standard investment choices.

It would also permit certain public pension funds to invest directly in crypto-linked ETFs and give the state treasurer authority to place funds from specific accounts into stablecoin-based ETFs.

He added that the legislation is intended to balance investment choice with regulatory guardrails while allowing the state to explore potential government use of blockchain technology through pilot programs.

The legislation goes beyond retirement investing and takes aim at local regulation. Cities and counties would be prohibited from passing rules that place “unreasonable” limits on digital assets if similar rules do not apply to traditional financial activity.

While some states permit limited crypto investment flexibility, none currently mandate it.

In 2025, Kentucky followed by formally recognizing self-custody as a protected property right. Wyoming has also approved laws that allow public pension funds to invest in digital assets.

Elsewhere, Arizona introduced legislation that would allow Bitcoin ETFs in retirement accounts, while Florida outlined legal pathways for holding digital assets through ETFs in certain state funds.

The fund also holds roughly $13.6 million in Ethereum through the Grayscale Ethereum Trust. Wisconsin’s state investment board has also disclosed more than $387 million in Bitcoin ETF exposure.

States are also widening their use of digital assets outside of investing. In September, Ohio finalized plans to accept Bitcoin and other cryptocurrencies for official state payments.

Market Context

Indiana Targets First-in-the-Nation Mandate for Bitcoin in Public Pensions

Pierce said the bill is designed to give Indiana residents more financial flexibility as digital assets become a larger part of the broader economy.

Why It Matters

The bill adds clear safeguards for self-custody. It states that private digital asset keys could only be demanded through a court order and only when no other legal method of access is available.

Details

That protection would extend to crypto payments, private ownership of digital wallets, and mining operations.

It would also prevent local governments from zoning out mining facilities from industrial zones and would protect properly zoned residential mining activity.

If enacted, Indiana would become the first state in the country to require publicly managed retirement programs to provide Bitcoin exposure as a standard option.

U.S. States Expand Crypto Access in Pensions, Payments, and Property Laws

Other states have taken related but narrower steps. Oklahoma passed a law in 2024 protecting residents’ right to hold crypto in self-custody wallets and blocking special taxes on Bitcoin transactions.

Indiana’s proposal stands apart by making crypto ETF access a requirement rather than a choice.

Momentum around crypto-linked retirement exposure continues to build nationwide. In August, Michigan’s state retirement system tripled its Bitcoin ETF holdings to 300,000 shares, valued at about $11.4 million, according to regulatory filings.

In October, California updated its Unclaimed Property Law to ensure dormant crypto is not automatically converted into cash when

transferred to state custody.