Recent developments indicate that a coalition of lawmakers is urging the Securities and Exchange Commission (SEC) to accelerate the implementation of an executive order from President Donald Trump. This order has the potential to allow 401(k) plans to encompass a broader range of investment options, particularly cryptocurrencies and other alternative assets.
On August 7, 2025, Trump signed the executive order, which mandates federal agencies to review regulations that have historically restricted retirement investors from engaging with private market assets.
Lawmakers Urge SEC to Act Promptly
A group of nine House Representatives, led by French Hill and Ann Wagner, reached out to SEC Chair Paul Atkins via a letter dated September 22. They advocated for immediate action concerning the implementation of the president’s order.
The lawmakers requested that the SEC collaborate with the Department of Labor to ensure that participant-directed defined-contribution plans can safely incorporate assets such as private equity and digital currencies while also safeguarding investors.
NEW: Chairman @RepFrenchHill and others sent a letter urging @SECGov Chair to support President Trump’s recent EO allowing 401(k) investors to access alternative assets… pic.twitter.com/oIJ2kWavUg
— Financial Services GOP (@FinancialCmte) September 22, 2025
Labor Department Changes Foster New Opportunities
This legislative push comes in light of a significant policy shift at the Department of Labor (DOL). Earlier in May, the DOL rescinded a 2022 advisory that had cautioned plan trustees about the risks of including cryptocurrency in 401(k) investment options.
This withdrawal has positioned the DOL in a more neutral role, placing heightened responsibility on the SEC to articulate concrete guidelines for incorporating such investment choices into retirement plans.
Potential Market Impact
Insights from various reports indicate that the US defined-contribution market manages approximately $12 trillion and serves over 90 million citizens. Even a modest allocation to crypto investments could lead to significant capital flowing into these assets.
Industry analysts have noted that even a mere 1% allocation across this vast market could translate to billions directed toward crypto-focused funds. Fund managers are keenly monitoring these trends.
Caution from Legal Experts
While there is considerable enthusiasm among investment circles, experts have voiced concerns. Critics emphasize the inherent volatility of cryptocurrencies, along with the unique challenges they present in terms of record-keeping, valuation, and custody.
Some professionals warn that integrating these high-risk assets into retirement plans without proper regulations could pose serious legal and financial repercussions for plan sponsors. The general sentiment across the industry reflects a blend of hope tempered with caution.
Featured image from Nasdaq, chart from TradingView
