Indiana lawmakers are moving closer to bringing cryptocurrency into the state’s public pension system, while simultaneously advancing strict new limits on crypto ATM operations. A package of House-backed digital asset bills has cleared a key legislative checkpoint and is expected to head to the state Senate next week after what lawmakers described as a brief “tactical pause.”
The proposals reflect Indiana’s two-track approach to crypto: cautiously allowing institutional exposure through regulated investment products, while clamping down on retail-facing infrastructure seen as vulnerable to abuse.
Crypto Exposure for Indiana Pension Plans
At the center of the debate is House Bill 1042, which would allow members of certain public pension plans to access crypto investment options through self-directed brokerage accounts. In addition, the state itself would be permitted to allocate pension assets into crypto exchange-traded funds (ETFs), rather than holding digital assets directly.
The bill draws a clear line between plan types. Defined benefit plans, which are managed entirely by the state, would remain under centralized control. Defined contribution plan members, however, would gain the ability to choose crypto-linked investments if they opt into self-directed accounts.
The Indiana Public Retirement System testified as neutral on the proposal. Tom Perkins, the system’s investment counsel and director of investment stewardship, told lawmakers that officials had worked closely with the House to refine the bill and were “more or less happy” with its current form.
Beyond pensions, the legislation would also limit how state and local governments can interfere with lawful crypto activity. Except for the Indiana Department of Financial Institutions, agencies would be barred from banning crypto mining businesses, restricting crypto payments for legal services, or seizing digital wallets based on the technology used. Local governments would likewise be prevented from blocking mining operations in industrial zones or stopping residents from mining crypto at home.
The move mirrors a broader shift in Washington. As previously reported, Paul Atkins, chair of the U.S. Securities and Exchange Commission, has publicly suggested that conditions are now right to allow crypto exposure in 401(k) retirement accounts, signaling growing regulatory comfort with crypto-linked investment products.
Crypto ATM Scams Trigger Regulatory Push
Running in parallel is a far tougher stance on crypto ATMs, driven by rising fraud cases. Indiana recorded 35 crypto ATM scam incidents last year, with losses exceeding $400,000, prompting lawmakers to introduce sweeping new controls on virtual currency kiosks.
The bill’s author, Rep. Wendy McNamara, described the machines as “a powerful tool for scammers” particularly targeting seniors and people in crisis. Victims, she said, often believe they are paying bills or helping loved ones, only to discover they have sent funds directly to criminals.
Under the proposal, crypto ATM operators would be required to obtain a money-transmitter license, receive approval from the Department of Financial Institutions before installing machines, and comply with expanded data reporting rules. Operators would also be forced to refund victims the full transaction amount, including fees, verify customer identities, and cap transaction fees at 10%. Additional limits would restrict how much users can transact over daily and monthly periods.
Industry Pushback Intensifies
Crypto ATM operators argue the rules would make it impossible to operate in Indiana. CoinFlip general counsel Larry Lipka told lawmakers the proposed fee cap is unrealistic, noting the company’s average transaction fees across its 100-plus Indiana kiosks range between 17% and 19%.
Lipka also pushed back against mandatory full refunds for scam victims, arguing that federal law only requires refunds for unauthorized transactions, such as hacked bank accounts—not cases where users were manipulated but technically authorized the paymen
A Balancing Act Ahead
As the bills move toward the Senate, Indiana faces a familiar policy tension. Lawmakers appear increasingly comfortable with institutional and long-term crypto exposure, especially through ETFs and regulated pension structures. At the same time, they are signaling zero tolerance for consumer harm in retail crypto access points.
Whether the state can strike that balance-encouraging innovation while aggressively policing risk-will likely determine how Indiana’s crypto landscape evolves in the years ahead.
