Cryptocurrency ATMs Banned, Retirement Accounts Open for Investment! Indiana Advances Dual-Track Legislation

Indiana Governor Mike Braun signed House Bill 1042 (HB 1042) on March 3, requiring certain public retirement plans to offer at least one cryptocurrency investment product by July 1, 2027; simultaneously, the House Bill 1116, which bans crypto ATMs statewide, has also passed the legislature and awaits the governor’s signature.

HB 1042: Public Retirement Plans Mandated to Offer Crypto Investment Options with Consumer Protections

Introduced by Representative Kyle Pierce, HB 1042 was approved by Indiana’s Senate and House on February 25, 2026, and officially signed into law on March 3. The bill mandates that the following public savings and retirement plans provide an autonomous brokerage option that includes at least one cryptocurrency investment product: legislator fixed contribution plans, Hoosier START education savings plans, and certain public employee and teacher retirement accounts. Plan administrators must establish these investment channels by July 1, 2027.

HB 1042 also includes proactive protections for crypto asset users, prohibiting state and local governments from levying special taxes on: payments made with cryptocurrencies for legal goods and services, or holding personal assets in custodial wallets.

This legislation aligns with federal policy directions—last August, President Trump signed an executive order allowing 401(k) retirement plans to include cryptocurrency investments. Indiana’s move is a recent example of states proactively aligning with federal policies.

HB 1116: Statewide Ban on Cryptocurrency ATMs to Take Effect Soon

Meanwhile, the Indiana House Bill 1116, passed last week, is expected to officially ban the operation of virtual currency self-service terminals (i.e., crypto ATMs) across the state once signed by the governor.

Key Points of Indiana’s Dual-Legislation on Cryptocurrency

HB 1042 (Effective): Requires designated public retirement plans to offer crypto investment options by July 1, 2027; bans special taxes on payments with cryptocurrencies and on custodial wallets; covers legislator fixed contribution plans, Hoosier START education savings, and some public employee and teacher retirement accounts.

HB 1116 (Pending Governor’s Signature): Will fully prohibit crypto ATMs within Indiana; awaiting Governor Mike Braun’s formal signature.

Frequently Asked Questions

Why does Indiana want to ban crypto ATMs?

Crypto ATMs are often used by scammers due to their high anonymity and traceability challenges, especially in schemes targeting seniors and vulnerable groups. Several states have already enacted laws restricting or banning crypto ATMs. If HB 1116 passes, Indiana will become one of the leading states with a comprehensive ban on crypto ATMs.

How does HB 1042 directly affect Indiana retirement plan beneficiaries?

Beneficiaries holding eligible retirement accounts (including some public employees, teachers, and legislators) will have the option to include at least one cryptocurrency investment product by July 1, 2027. This is not mandatory; it provides a diversified investment channel, allowing users to decide whether to allocate part of their retirement funds into crypto assets.

Is there a contradiction between Indiana opening retirement crypto investments and banning ATMs?

These policies target different issues and are not contradictory. HB 1042 pertains to a regulated framework for retirement investments, providing compliant institutional investment options; HB 1116 addresses the real risk of crypto ATMs being used for scams, serving as a consumer protection measure. This “gradual opening with strict regulation” approach reflects some states’ efforts to balance innovation and consumer safety in crypto policy.