Lawmakers Urge SEC to Fast-Track Crypto in 401(k) Plans
U.S. lawmakers are urging Paul Atkins, the Chairman of the Securities and Exchange Commission, to expedite an executive order that would enable the inclusion of cryptocurrency investments in U.S. 401(k) retirement plans.
In a letter sent on Monday, nine lawmakers, including French Hill, who chairs the House Financial Services Committee, and Anne Wagner, the chair of the Capital Markets Subcommittee, requested Atkins to “provide rapid support” to the Labor Secretary. They emphasized the need for adjustments to existing regulations and guidance.
Highlighting President Trump’s executive order from August, which aimed to “democratize access to alternative assets for 401(k) investors,” the legislators pointed out that the SEC is expected to enhance access to alternative assets like cryptocurrency in retirement plans while considering the rules for accredited investors and qualified buyers.
“We hope that such actions will support 90 million Americans who are currently restricted from investing in alternative assets to ensure dignified and comfortable retirement,” the lawmakers conveyed.
This appeal comes after the Labor Bureau revised its stance on cryptocurrency in May, which had previously urged caution regarding its inclusion in retirement funds. The legislators stated that “all Americans preparing for retirement should access funds, including investments in alternative assets, if the relevant plan trustees determine that such access provides an appropriate opportunity to enhance net risk-adjusted returns.”
A Modest Allocation Could Channel $100 Billion into Crypto
Implementing Trump’s executive order could unlock a significant opportunity within the $9.3 trillion U.S. 401(k) retirement market, paving the way for a considerable influx of crypto-related products as a long-term investment strategy.
Even a mere 1% allocation from the 401(k) funds could result in $93 billion flowing into the cryptocurrency market. Since its launch in January 2024, approximately $60.6 billion has already moved into Bitcoin exchange sales funds.
Some Public Pension Funds Already Provide Crypto Exposure
For example, Michigan’s retirement system has invested $10.7 million in ARK 21Shares Bitcoin ETFs in the second quarter and continues to grow its holdings in crypto ETFs.
It also owns about 460,000 shares of Grayscale Ethereum Trust (ETHE), valued at around $15.6 million. However, not all funds are expanding their crypto investments; the Wisconsin Investment Commission divested its shares in BlackRock’s Ishares Bitcoin Trust ETF in the first quarter after being one of the early adopters of crypto ETFs.
