US lawmakers urge SEC to act on Trump’s crypto retirement plan
News Summary
Nine US lawmakers, including House Financial Services Committee Chairman French Hill and Subcommittee on Capital Markets Chairman Ann Wagner, have urged Securities and Exchange Commission (SEC) Chair Paul Atkins to accelerate the executive order (EO) enabling crypto investments in US 401(k) retirement plans. President Donald Trump's August EO on “Democratizing Access to Alternative Assets for 401(k) Investors” instructed the SEC to make alternative assets like crypto more accessible in participant-directed retirement plans, considering accredited investor and qualified purchaser rules. Lawmakers believe this will benefit 90 million Americans currently restricted from alternative assets, helping them secure a dignified retirement. This follows the Labor Department's reversal of its anti-crypto guidance in May, which had previously cautioned fiduciaries about including crypto in retirement funds. Implementing Trump's EO could open the $9.3 trillion US 401(k) retirement market to crypto, with even a 1% allocation potentially driving $93 billion in inflows, significantly exceeding the $60.6 billion attracted by spot Bitcoin ETFs since their January 2024 launch. While some public pension funds, like the State of Michigan Retirement System, have expanded crypto ETF holdings, others, such as the State of Wisconsin Investment Board, have divested from them.
Background
This news unfolds against a backdrop of the US government, under President Donald Trump, actively pushing for the integration of cryptocurrencies into mainstream financial systems. President Trump signed an executive order in August on “Democratizing Access to Alternative Assets for 401(k) Investors,” explicitly instructing the Securities and Exchange Commission (SEC) to make alternative assets like crypto more accessible in participant-directed retirement plans, while considering accredited investor and qualified purchaser rules. This follows the US Labor Department's reversal in May of its cautious guidance on cryptocurrency investments, which had partially cleared the way for crypto assets to enter retirement funds. The US 401(k) retirement market currently stands at a substantial $9.3 trillion. Since the launch of spot Bitcoin Exchange-Traded Funds (ETFs) in January 2024, they have attracted $60.6 billion in inflows, demonstrating strong market demand for cryptocurrency investments.
In-Depth AI Insights
What are the deeper politico-economic motivations behind this initiative? - The Trump administration's push to integrate crypto into 401(k)s, while ostensibly about