US Legislators Urge SEC to Address Trump’s Cryptocurrency 401(k) Proposal

US legislators have urged Securities and Exchange Commission Chair Paul Atkins to expedite the executive order facilitating crypto investments within US 401(k) retirement plans.

In a letter sent on Monday, nine lawmakers, including House Financial Services Committee Chairman French Hill and Subcommittee on Capital Markets Chairman Ann Wagner, requested that Atkins “provide swift assistance” to the Secretary of Labor and make necessary changes to existing regulations and guidance.

They emphasized that under President Donald Trump’s August EO on “Democratizing Access to Alternative Assets for 401(k) Investors,” the SEC was directed to enhance accessibility of alternative assets such as crypto in participant-directed retirement plans, taking into account accredited investor and qualified purchaser rules.

“We hope that such actions will assist the 90 million Americans currently restricted from investing in alternative assets, helping them secure a dignified and comfortable retirement,” the nine lawmakers stated.

This initiative follows the Labor Department’s reversal of its anti-crypto guidance in May, which warned fiduciaries to exercise extreme caution when including crypto in retirement funds.

“Every American planning for retirement should have access to investment options that include alternative assets when the relevant plan fiduciary decides that such access presents a suitable opportunity… to improve the net risk-adjusted returns,” the lawmakers asserted, which included signatures from Frank D. Lucas, Warren Davidson, Marlin Stutzman, Andrew R. Garbarino, Michael V. Lawler, Troy Downing, and Mike Haridopolos.

A modest allocation could see $100 billion flow into crypto

Implementing Trump’s EO would grant crypto entry to the $9.3 trillion US 401(k) retirement market, potentially driving larger investments in crypto exchange-traded products while establishing crypto as a viable long-term investment strategy.

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A mere 1% crypto allocation from the $9.3 trillion in 401(k) plans could lead to $93 billion in inflows, significantly surpassing the $60.6 billion that has been invested in spot Bitcoin exchange-traded funds since their inception in January 2024.

Some public pension funds already offer crypto exposure

The State of Michigan Retirement System has been actively increasing its crypto ETF holdings, acquiring $10.7 million worth of the ARK 21Shares Bitcoin ETF in the second quarter.