Governor Mike Braun has signed House Bill 1042 into law, formalizing new protections for digital asset users in Indiana and setting guardrails around how state and local authorities may regulate cryptocurrency activity.
Summary
- HB 1042 prohibits state and local governments from imposing discriminatory taxes or restrictions targeting cryptocurrency transactions.
- The law protects the right of Indiana residents to self-custody digital assets.
- Indiana formally defines cryptocurrency in state statute, providing regulatory clarity for courts and agencies.
HB 1042 becomes law as Indiana expands legal clarity for digital assets
The measure, which cleared the Indiana General Assembly earlier this session, establishes statutory definitions for cryptocurrency and limits the ability of state and local governments to impose discriminatory taxes, fees, or restrictions specifically targeting digital assets.
Supporters describe the legislation as a “Bitcoin rights” framework designed to provide clarity and predictability for residents who hold or transact in crypto.
Under HB 1042, state and local governmental units are prohibited from enacting rules that single out digital asset transactions for special taxation or treatment compared to other forms of payment. The law also reinforces the right of individuals to self-custody digital assets, preventing most public agencies from restricting a person’s ability to hold cryptocurrency in a private wallet.
Regulatory authority remains with the appropriate financial oversight bodies, including the state’s Department of Financial Institutions.
The legislation also opens the door for cryptocurrency exposure within certain state-managed retirement and savings programs. Under HB 1042, plan administrators for designated public retirement and education savings plans will be required to offer a self-directed brokerage option that includes at least one cryptocurrency-linked investment choice, such as a regulated exchange-traded fund tied to bitcoin.
The measure does not mandate that pension funds directly purchase or hold digital assets as part of their core portfolios; instead, it allows individual participants to decide whether to allocate a portion of their retirement savings to crypto through approved investment vehicles.
Backers of the bill have argued that the measure positions Indiana as a pro-innovation state amid growing national debate over crypto regulation. By clearly defining cryptocurrency in statute as a digital medium of exchange secured by cryptography and not issued by a central authority, lawmakers say the state reduces ambiguity for courts, regulators and businesses operating in the space.
The signing follows increasing legislative activity across the United States focused on digital asset rights and taxation.
With HB 1042 now enacted, Indiana joins a small but growing number of states that have codified protections for crypto holders while maintaining oversight through existing financial regulatory frameworks.
