US lawmakers urge SEC to act on Trump’s crypto retirement plan

US lawmakers have called on Securities and Exchange Commission Chair Paul Atkins to help accelerate the executive order enabling crypto investments in US 401(k) retirement plans.

In the letter on Monday, nine lawmakers, including House Financial Services Committee Chairman French Hill and Subcommittee on Capital Markets Chairman Ann Wagner, said that Atkins was asked to “provide swift assistance” to the Secretary of Labor and to make any necessary adjustments to its current regulations and guidance.

They also noted that under President Donald Trump’s August executive order on “Democratizing Access to Alternative Assets for 401(k) Investors,” the SEC was instructed to make alternative assets like crypto more accessible in participant-directed retirement plans, in consideration of accredited investor and qualified purchaser rules.

“We are hopeful that such actions will help the 90 million Americans that are currently restricted from investing in alternative assets to secure a dignified, comfortable retirement,” the nine lawmakers said.

Source: Cointelegraph

This move follows the reversal of the Labor Department’s anti-crypto guidance in May, which had cautioned fiduciaries to be extremely careful when including crypto in retirement funds.

“Every American preparing for retirement should have access to funds that include investments in alternative assets when the relevant plan fiduciary determines that such access provides an appropriate opportunity… to enhance the net risk-adjusted returns,” said the lawmakers, who also included 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 open crypto to the $9.3 trillion US 401(k) retirement market, driving larger inflows into crypto exchange-traded products while positioning crypto as a potential long-term investment strategy.

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Even a 1% crypto allocation into the $9.3 trillion held in 401(k) plans could drive $93 billion in inflows, which would be considerably larger than the $60.6 billion worth of capital that has flowed into the spot Bitcoin exchange-traded funds since launching in January 2024.

Some public pension funds already offer crypto exposure

The State of Michigan Retirement System has continued expanding its crypto ETF holdings, snapping up $10.7 million worth of the ARK 21Shares Bitcoin ETF in the second quarter. 

It also held onto 460,000 shares of the Grayscale Ethereum Trust (ETHE), valued at around $15.6 million.

However, not all have held. The State of Wisconsin Investment Board unloaded its shares in BlackRock’s iShares Bitcoin Trust ETF in the first quarter after being one of the first public pension funds to invest in the crypto ETFs.

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