Bitcoin gains safeguards as Indiana HB 1042 advances

HB 1042: Allows ETFs, protects self-custody, limits direct tokens

Indiana’s legislature has passed HB 1042, a bitcoin rights bill that now awaits Governor Braun’s signature, as reported by The Block (https://www.theblock.co/post/391378/indianas-bitcoin-rights-bill?utm_source=openai). The measure defines guardrails for digital asset access while clarifying privacy and property protections.

The bill would allow regulated cryptocurrency exchange-traded funds in certain public retirement programs, while constraining direct token exposure, particularly in more conservative plan structures. It codifies self-custody protections and limits compelled disclosure of private keys to narrowly tailored court orders when no other legally admissible method exists, according to Indiana House Republicans (https://www.indianahouserepublicans.com/news/press-releases/state-rep.-pierce-introduces-legislation-to-expand-access-to-cryptocurrency-investment-options/?utm_source=openai). Together, those provisions aim to separate diversified, overseen ETF exposure from direct token risks.

Why this matters for pensions and crypto ATM regulation

HB 1042 sits at the intersection of retirement policy and consumer protection. For pensions, it could expand choice via regulated ETFs without forcing direct token custody into public plans. For retail users, parallel efforts target cryptocurrency kiosks, a channel associated with fraud against older adults.

Supporters frame the bill as modernization with guardrails rather than speculation. “Insurance for the future of finance,” said Rep. Kyle Pierce (R-Anderson), the bill’s sponsor. He has pointed to regulated ETF on-ramps and privacy protections as central features of the framework.

Advocates for older Hoosiers have focused on fraud prevention at crypto ATMs. AARP Indiana has urged licensing, clear disclosures and warnings, receipts, and transaction limits to mitigate scams that target seniors, emphasizing transparency and recoverability where feasible.

Institutional stakeholders have signaled qualified caution. According to Indiana Capital Chronicle (https://indianacapitalchronicle.com/2026/02/05/indiana-lawmakers-consider-crypto-pension-investments-atm-scam-crackdown/?utm_source=openai), the Indiana Public Retirement System indicated it was broadly comfortable with the negotiated bill language while remaining watchful of ETF risk exposure. The outlet also reported that crypto ATM operators warned fee caps (for example, 10%) and strict transaction limits could render machines uneconomic, especially where cash logistics are costly.

If signed, near-term effects would center on implementation planning rather than immediate portfolio shifts. Public retirement programs typically add options through self-directed brokerage features, and fiduciaries would still vet availability, disclosures, and risk controls before any ETF access is offered.

Self-custody and privacy provisions would take effect through the statutory standard: a court could compel private keys only when no other legally admissible means exist. That sets a high bar meant to protect property and due process while preserving investigatory pathways.

On crypto ATMs, the immediate focus is likely compliance design. Proposed licensing, fee or transaction parameters, and mandatory warnings are intended to reduce scam losses, though final thresholds may be adjusted to balance fraud mitigation and operational viability.

At the time of this writing, Bitcoin (BTC) was about $68,289, with sentiment described as bearish, volatility elevated near 9.88%, and a neutral RSI around 42.98. These figures offer market context, not investment guidance.

Key questions on pensions and private key protections

Will HB 1042 let public pension funds invest in crypto, and is it limited to ETFs?

The bill enables access to regulated cryptocurrency ETFs within certain public retirement programs, likely via self-directed brokerage arrangements. Direct token exposure remains constrained, especially for defined benefit plans. Plan fiduciaries would determine implementation details.

How does the bill protect self-custody and private keys, and when could keys be compelled by a court?

It protects self-custodied wallets by restricting disclosure of private keys. A court could compel keys only if no other legally admissible method exists. This balances property privacy with evidentiary needs.

HB 1042 awaits the governor’s signature; pension lineup changes, if any, would proceed through standard fiduciary and administrative processes over time.

Crypto ATM proposals emphasize licensing, warnings, receipts, and potential fee or transaction limits to curb scams, while operators warn some caps could make kiosks uneconomic.