Indiana lawmakers consider crypto pension investments, ATM scam crackdown

Indiana lawmakers advanced a multi-part digital currency legislative package that balances expansion of cryptocurrency access in public pension systems with consumer protections targeting ATM-based cryptocurrency fraud. House Bill 1042, the centerpiece pension measure, cleared the halfway point in the legislative session and is poised for Senate floor consideration within the week, pending refinement by the Insurance and Financial Institutions Committee chaired by Sen. Scott Baldwin.

The pension measure creates a bifurcated framework for public retirement plan participants. Members in defined contribution plans would gain the ability to elect self-directed brokerage accounts offering cryptocurrency investment options, while the state could independently invest pension plan assets into crypto exchange-traded funds. By contrast, defined benefit plan participants would not gain individual investment discretion; the state would retain full control over asset allocation decisions. Rep. Kyle Pierce, R-Anderson, authored the bill and explained this distinction to lawmakers. The Indiana Public Retirement System, which manages state pension assets, testified in a neutral capacity but indicated general satisfaction with the proposal's current form following collaborative refinement with House sponsors.

Beyond pension provisions, the legislative package addresses state preemption concerns around cryptocurrency mining and operations. Proposed language would prohibit local governments from blocking digital mining firms or data centers from operating in industrial-zoned areas and would restrict state agencies (with the exception of the Indiana Department of Financial Institutions) from banning digital mining businesses, restricting crypto transactions for legal services, or seizing custody of digital wallets using specified technologies. The measures would also permit individual residents to engage in cryptocurrency mining within residential properties.

The legislation simultaneously addresses emerging fraud risks associated with cryptocurrency ATM operations. Law enforcement agencies have flagged these machines as vectors for consumer scams generating millions in victim losses, prompting the inclusion of new operational limitations on crypto ATM deployments within the broader package. Committee chair Baldwin characterized the pause before advancing bills as a "tactical" decision designed to ensure legislative language properly aligns with his pending overhaul of Indiana's consumer lending framework.