Indiana Senate Committee advance bill HB1042 allowing pension funds to invest in crypto

Indiana Senate lawmakers are pushing House Bill 1042, which will allow specific public pension funds to invest in crypto options, including ETFs. However, the bill’s author, Rep. Kyle Pierce, R-Anderson, explained that participants in eligible pension plans do not have the option to decide how their investments are managed.

Meanwhile, Tom Perkins, the investments counsel and director of investment stewardship, emphasized that it has taken extensive collaborative work with the House to reach the bill’s current form. Rep. Pierce further explained that only those with defined contribution plans would be able to take advantage of the changes. 

Other key provisions of HB1042 would also block local governments, except the Indiana Department of Financial Institutions, from restricting crypto transactions for legal services, taking custody of digital wallets using specific technology, or banning the operations of a digital mining business.

State agencies will not be able to stop digital mining companies, including data centers, from operating in industrial-zoned areas or prevent individual “Hoosiers” from mining crypto in their homes.

Rep. Pierce says the bill needs more work over this year

Rep. Kyle Pierce notes that bill HB1042 needs more work this year. He further points out a few issues to address, emphasizing that the product is not doing well so far.

The Committee discussed at length another amendment that would remove some provisions, but Sen. Scott Baldwin, R-Noblesville, decided not to call it.

“We’re never in the business of putting anybody out of business. That’s not our goal here, in the state of Indiana.”

–Sen. Scott Baldwin, Chair Tax and Fiscal Policy, Insurance and Financial Institutions

Meanwhile, Rep. Pierce emphasizes that the proposed amendments to HB1042 will offer individual choice rather than the plans in which the state handles investment decisions.

However, Sen. Baldwin stressed that Indiana lawmakers would continue their discussions and, if necessary, make further amendments on second reading. The panel passed HB1042 (as updated February 11, 2026) in a 6-2 vote, along party lines. The bill is expected to take effect on July 1, 2026.

Bill excludes investment in stablecoin funds

While the bill will allow state pension funds to invest in crypto-related ETFs, it excludes funds mainly tied to stablecoins. Indiana lawmakers emphasize that this filter was added to ensure retirement exposure remains linked to market-traded crypto assets rather than dollar-backed tokens.

Meanwhile, supporters say ETF-based access gives regulated exposure while avoiding the operational risks of directly holding tokens. 

According to the committee filing and legislative update, House Bill 1042 now heads to the full Senate for voting. Public employee plans like Hoosier START will be required to offer self-directed brokerage accounts if the bill becomes law, starting July 1, 2026. Workers can choose to invest part of their retirement savings in approved crypto products through these brokerage accounts. 

It is also important to note that the state will not directly buy crypto. Instead, workers can decide their level of crypto exposure based on their investment goals and risk tolerance. Indiana’s Public Retirement System currently oversees over $55 billion in managed public pension funds.

On a national scope, Indiana is not the only U.S. state exploring crypto options for public retirement plans or funds. Other states, like Texas, Oklahoma, New Hampshire, and North Carolina, have either already introduced or are advancing similar proposals. Some of these plans will allow limited exposure to crypto for public funds, while others will focus on providing retirement account holders with more crypto investment choices.

In North Carolina, the North Carolina Retirement Systems started investing pension funds in crypto in late 2025, after the state’s legislative leaders pushed through a bill enabling such market wagers. The legislative leaders pushed the law through despite objections from state employees whose salaries fund the plan.

Several months later, the state has seen over 50% of its crypto investments wiped out, resulting in losses of more than $33 million since last September. 

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