On March 3, the governor of Indiana signed into law House Enrolled Act 1042, establishing new statutory provisions for cryptocurrency investment and digital asset regulation. The law requires that by July 1, 2027, defined contribution retirement plans for legislators, public employees, and teachers offer self-directed brokerage accounts with at least one cryptocurrency investment option. The law provides that governing boards may adopt investment guidelines and valuation methods and shall determine the appropriate administrative fees. The statute defines “cryptocurrency” as a virtual currency that is not issued by a central authority, is designed to function as a medium of exchange, and uses encryption technology to regulate the generation of units of currency, verify fund transfers, and prevent counterfeiting. The definition excludes payment stablecoins. Additionally, it clarifies that developing or using software for noncustodial transfer of digital assets does not constitute money transmission under licensing laws.

The law prohibits public agencies other than Indiana’s Department of Financial Institutions from restricting the use or acceptance of digital assets as payment for lawful goods and services, from restricting a person’s ability to take or maintain custody of digital assets using a self-hosted wallet or hardware wallet, or from imposing unequal taxes or fees on such transactions. It also bars those agencies from limiting blockchain activities such as operating nodes, developing software, transferring assets, or participating in staking. The law also prohibits public agencies from banning digital asset mining businesses, subject to applicable zoning enforcement. At the local level, governments may not ban digital asset mining businesses in industrial zones or private mining in residential areas, nor may they impose noise limits that are not applicable to other businesses in an area zoned for industrial use or other residences in an area zoned for residential use, as applicable. Courts may compel disclosure of a digital asset private key only if no other admissible information is sufficient to provide access to the digital asset.