- The Indiana House of Representatives has approved HB1042, a digital asset legislation upholding digital asset rights, preventing predatory crypto taxation, and including digital assets in the state’s retirement portfolios.
- The legislation has now moved to the governor’s desk and is awaiting potential approval.
Retirement Access and Regulatory Clarity
HB1042 first defined cryptocurrency as a virtual currency that is not centrally issued, that is designed to serve as a means of exchange, and that uses encryption technology to manage the production of units of the currency, verify transfers, and block duplication. However, the bill clarifies that payment stablecoins do not fall into the scope of cryptocurrency.
The legislation has also approved the creation of a special investment option by the state retirement board, effective July 1, 2027. This option within the state retirement system will allow government employees to choose and manage their investments in at least one cryptocurrency.
In addition, it provides clarity on the authority to regulate digital assets within the state. The bill prohibits every public agency other than the Department of Financial Institutions from adopting or implementing rules or regulations relating to the prohibition of people from using digital assets as a method of payment for legal goods and services.
Similarly, no government agency besides the Department of Financial Institutions shall restrict anyone from having or maintaining custody of digital assets via a “self-hosted wallet or hardware wallet.”
Furthermore, the legislation prohibits all sorts of discriminatory taxation or fees against digital asset users compared to traditional financial transactions. Only the Department of Financial Institutions can charge or regulate fees or taxes related to digital asset custody or exchange.
Indiana Limits Local Control Over Crypto Mining and Protocol Activities
The bill also maintains the same policy direction in the area of digital asset mining. It blocks all public agencies, besides the Department of Financial Institutions from adopting or implementing regulations to restrict individuals or businesses from operating a node to connect to a blockchain protocol and participate in its operation.
By extension, no government bodies are authorized to selectively enforce regulations against digital asset mining businesses that meet the requirements to operate in an industrial zone. The new legislation also forbids public agencies from controlling the level of noise generated by the aforementioned businesses that are not applicable to other firms within the zone.
This rule applies to other activities such as staking, transferring digital assets, and building software on blockchain protocols. However, there are specific exceptions where a public agency other than the state’s financial institutions department may enforce rules related to the location of a digital asset mining business.
The bill had impressive bipartisan support in both chambers, with the Senate voting 35-10 and the House voting 59-33 on Wednesday to advance it. It has now been sent to Mike Braun’s desk and could be signed into law soon.
