Lawmakers Push SEC to Unlock $12.5T 401K Market for Crypto

The landscape of retirement savings in the United States could be on the brink of a historic transformation. A coalition of lawmakers is urging the Securities and Exchange Commission (SEC) to move swiftly on President Donald Trump’s executive order that would open the $12.5 trillion 401K market to alternative assets, including cryptocurrency.

The executive order, signed on August 7, directs the Department of Labor and the SEC to revise rules that have long limited retirement savers to traditional assets like stocks and bonds. If enacted, the policy would allow Americans to diversify their retirement portfolios with digital assets, private equity, real estate, commodities, and other alternatives. The change would directly impact more than 90 million workers with employer-sponsored retirement plans.

On September 22, nine members of Congress, led by House Financial Services Committee Chairman French Hill and Representative Ann Wagner, urged SEC Chair Paul Atkins to move quickly. They praised the order for expanding access to asset classes historically reserved for the wealthy and called on the SEC to update the definition of accredited investors. Their letter highlighted that even modest allocations to crypto could enhance returns when deemed appropriate by fiduciaries.

For the cryptocurrency sector, the move is being seen as a watershed moment. Retirement savers have long been tied to fiat-denominated assets that are vulnerable to inflation. Allowing exposure to Bitcoin and other digital assets could provide a hedge against monetary debasement and open new avenues for long-term savings. Analysts estimate that even a one percent allocation of 401K assets into crypto could bring over 90 billion dollars in inflows, far exceeding recent investments into spot Bitcoin ETFs.

The SEC’s role will be crucial in shaping how these investments are introduced. Beyond clarifying the regulatory framework, the agency must modernize investor qualification standards and establish clear fiduciary safeguards. Bipartisan bills already advancing in Congress could support these changes by broadening the criteria for accredited investors through professional licenses or education. Meanwhile, the Department of Labor will ensure compliance under ERISA and provide guidance for fiduciaries managing these plans.

Supporters believe broader diversification will strengthen retirement outcomes, while critics warn of crypto’s volatility. Yet momentum is growing, and with Trump pledging to make the United States the crypto capital of the world, the inclusion of digital assets in retirement accounts now seems closer than ever. If carried out, this could mark one of the most significant steps toward mainstream adoption of crypto, transforming how Americans prepare for retirement and reshaping global financial markets.