U.S. President Donald Trump signed a new executive order, officially introducing cryptocurrency and other alternative asset investment channels to the $8.7 trillion 401(k) retirement fund market.
The order requires the U.S. Securities and Exchange Commission (SEC) and the Department of Labor, among other agencies, to redefine "qualified assets" in 401(k) rules, introducing higher risk and potentially higher return options to the investment portfolio.
Historically, 401(k) funds have been primarily limited to stocks, bonds, and some cash or commodity investments, due to strict restrictions imposed by the 1974 Employee Retirement Income Security Act on investment options provided by employers. The new policy will relax these regulations, allowing private equity, real estate, and cryptocurrencies into the retirement investment pool.
The White House expects that the detailed rules will be implemented in the coming months, depending on the progress of regulatory agencies' rule revisions.
This initiative is Trump's latest action to promote the United States as the "global capital of cryptocurrencies." Earlier this year, he signed the GENIUS Act to regulate the issuance of stablecoins and supported the SEC under the new chairman Paul Atkins to launch "crypto projects." The U.S. Commodity Futures Trading Commission (CFTC) is also advancing the "Crypto Sprint" program, exploring the feasibility of introducing spot cryptocurrency trading into futures exchanges.
