Indiana lawmakers are hoping to make the state a cryptocurrency leader by allowing the state to invest in digital currencies like Bitcoin for state savings and retirement plans while prohibiting local communities from restricting crypto companies.

The legislation, House Bill 1042, comes as excitement grows over the once obscure digital assets that have made millionaires and wiped-out fortunes. Its supporters now include some of the country’s most powerful people, including President Donald Trump and initially hesitant financial institutions, while the first major piece of crypto legislation passed Congress earlier this year. 

Now, Indiana is looking for a slice of the windfall.  The topic was one of just a few to get an earlier-than-usual hearing as lawmakers consider redistricting, signaling it’s a major topic of interest among Republicans.

“Crypto policy will become a mainstay of this committee’s work for probably years to come,” said bill author Kyle Pierce, R-Anderson, at a House Financial Institutions Committee meeting Dec. 4. 

A volatile investment?

Though the bill would allow public investment funds to delve into the world of digital currency, it stops short of allowing direct crypto investments.

Instead, the bill applies to cryptocurrency exchange traded funds, or EFTs — a safer, federally regulated fund that tracks crypto prices, either by holding the digital assets or a contract that speculates on prices in the future. 

The state investment programs required to provide such options include the 529 education savings plan and certain retirement funds for teachers, public employees and lawmakers. It also allows other state investment funds to place their assets in crypto EFTs.