On March 3, 2026, Indiana enacted House Enrolled Act 1042, establishing a statutory framework governing digital assets and related blockchain activity, while also introducing cryptocurrency investment requirements for certain state-administered retirement programs.
The legislation defines “cryptocurrency” as a decentralized virtual currency that uses encryption to validate transactions and control supply, while excluding payment stablecoins. It also adopts a broad definition of “digital asset,” capturing a range of blockchain-based instruments.
Key provisions of the law include:
- Limits on agency authority. Public agencies, other than the state’s department of financial institutions, may not prohibit or impair the use of digital assets as payment or restrict custody through self-hosted or hardware wallets.
- Protection of blockchain activity. The law prevents most state and local agencies from restricting core blockchain functions, including operating nodes, developing software, transferring digital assets, and participating in staking.
- Mining and local regulation. Digital asset mining businesses may not be broadly prohibited, though generally applicable zoning rules remain enforceable, and local governments are limited in imposing restrictions not applied to comparable uses.
- Clarification under money transmission laws. The statute confirms that developing or using software for noncustodial digital asset transfers does not, by itself, constitute money transmission.
- Retirement plan investment access. State-administered defined contribution plans must offer self-directed brokerage accounts with at least one cryptocurrency investment option by July 1, 2027, with governing boards authorized to set investment parameters, valuation methodologies, and administrative fees.
Putting It Into Practice: States are increasingly addressing digital assets through legislation that both enables use cases and limits regulatory fragmentation (previously discussed here and here). Indiana’s framework aligns with this trend by protecting core blockchain activities while centralizing oversight within designated financial regulators. As legislative activity continues to expand across jurisdictions, businesses should monitor developments and update compliance and operational strategies as necessary.
