Lawmakers Push SEC to Act Quickly on Trump’s Crypto 401(k) Initiative
TL;DR Breakdown
- U.S. lawmakers urge the SEC to accelerate action on Trump’s crypto 401(k) executive order.
- Congresspeople believe it could allow as many as 90 million Americans to invest their 401(k)s in alternative assets that they are currently restricted from investing in
- The letter affirms the current administration’s pro-crypto stance and continues to move digital assets to mainstream adoption.
In a letter signed on Monday, multiple US Congresspeople, including Chairman French Hill and Ann Wagner, Chairman of the Subcommittee on Capital Markets, expressed their support for President Donald Trump’s Executive Order (EO) 14330 related to 401(k) investments. The EO on “Democratizing Access to Alternative Assets for 401(k) Investors” allows Americans planning their retirement funds to invest in alternative assets to enhance their “net risk-adjusted returns.”
Trump’s Executive Order
The EO directs the Secretary of Labour to review and potentially amend its regulations regarding the Employee Retirement Income Security Act (ERISA). While the EO’s execution would enable investments into cryptocurrencies, “alternative assets” does not refer only to digital assets but also to private equity, debt, and real estate.
In the letter to SEC Chair Paul Atkins, the lawmakers urged him to assist the Secretary of Labour in reviewing and amending its existing policies and regulations. The Secretary of Labour and SEC are to work together to clear the way for the EO, making any regulatory and parallel changes that enable Americans to invest their retirement funds into a wider variety of assets to “secure a dignified, comfortable retirement.”
401(k) Reform Could Unlock Billions for Digital Assets
The EO is expected to bring in billions of dollars into the cryptocurrency ecosystem. With Americans holding more than $9.3 trillion in 401(k) retirement plans, just a small percentage being invested could see tens of billions poured into cryptocurrencies.
Broader Crypto Adoption in the US
Various state pension and retirement funds have already dipped their hands in crypto, including Wisconsin, Michigan, and Florida, mostly investing in Bitcoin Exchange Traded Funds (ETFs) while multiple others invest indirectly.
Other than retirement, many states like New Hampshire, Texas, and now Michigan have set up strategic crypto reserves, empowering the states to invest part of their investments into digital assets. On the other hand, Arizona is set to establish a crypto fund that is exclusively funded by forfeitures, seizures and crypto recovered in criminal investigations.
