Indiana's House Bill 1042 passed both legislative chambers on February 26, 2026, with a 59-33 vote in the House, sending one of the most comprehensive state-level crypto rights packages in the country to Governor Mike Braun's desk. If signed, the law takes effect July 1, 2026, and would make Indiana the latest state to draw a hard line between digital assets and discriminatory government overreach.
The bill does four things at once: it bans crypto-specific taxes, protects the right to self-custody, limits when the government can compel disclosure of private keys, and requires state retirement plans to offer at least one cryptocurrency investment option by July 2027. No other state has bundled all four provisions into a single piece of legislation.
Four Protections in One Bill, and Why the Bundle Matters
HB 1042, introduced by Rep. Kyle Pierce, is built on model legislation from the Satoshi Action Fund, the advocacy group behind similar bills in Oklahoma, Kentucky, Louisiana, Montana, and Arkansas. But Indiana's version goes further than any of its predecessors.
Tax protection. State and local agencies are prohibited from imposing taxes or fees that specifically target cryptocurrency payments or self-custodied holdings. If a tax does not apply to comparable financial instruments, it cannot be applied to crypto. This is not a tax exemption. It is an anti-discrimination clause: crypto transactions get the same treatment as dollar transactions, nothing more, nothing less.
Self-custody rights. Public agencies, with the exception of the Department of Financial Institutions, cannot adopt or enforce rules that prohibit individuals from taking custody of their own digital assets. This codifies what crypto users have long treated as a given but what no statute previously guaranteed in Indiana.
Private key protections. The bill limits compelled disclosure of private keys to narrowly tailored court orders, and only when no other legally admissible method of obtaining the information exists. This is the strongest private key protection language in any state Bitcoin rights bill to date.
Pension fund access. Specified state-administered retirement and savings plans, including the Legislators' Defined Contribution Plan, the Hoosier START plan, and public employees' and teachers' retirement funds, must offer participants a self-directed brokerage account with at least one cryptocurrency investment option by July 1, 2027. The bill constrains direct token exposure in more conservative plan structures but allows regulated crypto exchange-traded funds.
The 59-33 Vote and What the Opposition Could Not Stop
The 59-33 margin was not razor-thin, but it was not unanimous either. Thirty-three lawmakers voted against a bill that, at its core, says the government should not treat crypto differently from other financial instruments. The opposition arguments, while not extensively documented in public records, likely centered on the pension provision. Exposing public employee retirement funds to cryptocurrency volatility, even through regulated ETFs, remains a politically uncomfortable position for lawmakers who answer to teachers' unions and public sector workers.
But the pension provision is arguably the most consequential part of HB 1042. Oklahoma's bill protected self-custody. Kentucky's bill did the same and added mining protections. Pennsylvania's bill, which passed its House 176-26 in October 2024 but stalled in the Senate, covered self-custody and payment rights. None of them touched pension funds.
Indiana is the first state to say: if you work for the state government, you should have the option to allocate part of your retirement savings to Bitcoin or crypto ETFs through a self-directed brokerage account. That is a material shift in how state institutions relate to digital assets.
Where Indiana Fits in the State-Level Crypto Rights Map
The Satoshi Action Fund has shepherded Bitcoin rights legislation through at least six states. Here is how Indiana's bill compares:
| State | Bill | Self-Custody | Tax Protection | Mining Protection | Pension Access | Private Key Shield |
|---|---|---|---|---|---|---|
| Oklahoma | HB 3594 | Yes | Yes | Yes | No | No |
| Kentucky | HB 701 | Yes | No | Yes | No | No |
| Louisiana | HB 488 | Yes | Yes | No | No | No |
| Montana | SB 178 | Yes | No | Yes | No | No |
| Arkansas | HB 1788 | Yes | No | Yes | No | No |
| Indiana | HB 1042 | Yes | Yes | No | Yes | Yes |
Indiana trades mining protections for something no other state offers: pension fund access and private key protections. The bill does not address mining at all, which makes sense given Indiana's energy mix and the fact that the state has not seen the mining-versus-utility battles that drove legislation in Montana and Arkansas.
Meanwhile, California has introduced its own Bitcoin rights bill through the Assembly's Banking and Finance Committee. If California passes, nearly 40 million Americans would gain statutory self-custody protections. But California's bill has not cleared a single chamber yet. Indiana's has cleared both.
What Crypto Card Holders and Everyday Spenders Should Watch
The tax protection clause has direct implications for anyone spending crypto through a card. If Indiana's law takes effect, state and local tax authorities cannot impose additional levies on crypto payments that do not apply to equivalent dollar transactions. For users of cards like the Coinbase Card or Crypto.com cards, this removes one layer of regulatory uncertainty around everyday spending.
The self-custody provision matters for a different reason. Cards built on self-custodial infrastructure, where users hold their own keys and authorize transactions from their own wallet, now have explicit legal backing in Indiana. The bill does not name specific products, but the principle is clear: the state cannot prohibit you from holding your own crypto or using it to pay for legal goods and services.
The private key protection is the sleeper provision. In a post-FTX world where counterparty risk dominates the conversation, the ability to keep your keys private absent a specific court order is a meaningful legal shield. It does not make keys immune from law enforcement, but it raises the bar significantly.
The Kiosk Ban Complicates the Picture
Indiana's crypto-forward reputation is not uncomplicated. House Bill 1116, which would ban cryptocurrency kiosks in the state, has also passed the legislature and is heading to Governor Braun's desk alongside HB 1042. The kiosk ban targets the physical Bitcoin ATMs that have been linked to fraud and scam payments, particularly targeting elderly victims.
The two bills paint a more nuanced picture than "Indiana is pro-crypto." The state is pro-crypto rights for individuals who understand what they are doing. It is anti-crypto access points that have become vectors for fraud. Whether Governor Braun signs both, one, or neither will signal how the state balances innovation against consumer protection.
FAQ
Has Governor Braun said whether he will sign HB 1042? As of February 26, 2026, Governor Braun has not publicly stated his position on the bill. The Republican-controlled legislature passed it with a comfortable margin, and Braun has not signaled opposition.
When would the law take effect? Most provisions take effect July 1, 2026. The pension fund self-directed brokerage requirement has a later deadline of July 1, 2027.
Does this mean Indiana will not tax crypto at all? No. The bill bans discriminatory taxes, meaning taxes that apply specifically to crypto but not to comparable financial instruments. Standard income tax, capital gains tax, and other generally applicable taxes still apply to crypto transactions in Indiana.
Which state pension plans are affected? The Legislators' Defined Contribution Plan, the Hoosier START plan, public employees' retirement funds, and teachers' retirement fund plans must offer at least one crypto investment option through a self-directed brokerage account.
Does the private key protection mean law enforcement cannot access my wallet? No. Law enforcement can still obtain private keys through a court order. The bill requires that the order be narrowly tailored and that no other legally admissible method of obtaining the information exists. It raises the bar but does not create absolute immunity.
Overview
Indiana's HB 1042 is the most comprehensive state-level crypto rights bill in the country, combining tax protection, self-custody rights, private key protections, and pension fund access in a single package. The 59-33 vote sends it to Governor Braun's desk, where its fate will signal whether one of the Midwest's largest states is ready to treat digital assets as a normal part of the financial system. The pension provision, requiring state retirement plans to offer crypto investment options by July 2027, is a first among state Bitcoin rights bills and could set a template for the dozen-plus states still drafting similar legislation. For crypto users in Indiana, the practical impact is straightforward: spend, hold, and self-custody without fear of discriminatory taxes or compelled key disclosure, with a July 2026 effective date if the governor signs.
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