A United States Representative, Troy Downing, has proposed a bill to ensure President Donald Trump’s executive order becomes law. This executive order permits the inclusion of alternative assets, such as cryptocurrencies, in 401(k) retirement accounts.
Downing’s efforts began when he officially presented a draft bill to the House Financial Services Committee. Following this act, reliable sources anticipated a high likelihood that this would grant Executive Order 14330 legal power.
Notably, Trump issued this order on August 7 this year. It highlights that all Americans currently saving for retirement should be eligible for funds that include alternative assets. However, this is only applicable when appropriate based on a plan fiduciary.
Downing’s sparks optimism in the crypto ecosystem for a new crypto-friendly law
Alternative assets include private market investments, real estate, commodities, infrastructure initiatives, lifetime income strategies, and digital assets, all of which are managed via active investment vehicles.
On the other hand, an executive order highlights government priorities in a manner that differs from that of a law. Additionally, future leaders or courts can reverse it. Therefore, for a policy to become permanent, Congress must approve the bill in both chambers. This action takes place before the bill is signed into law.
However, for Trump’s executive order concerning retirement assets to become law, it requires the attention of three key parts of the US government. This includes the Department of Labor, the Securities and Exchange Commission (SEC), and the Treasury Secretary, who are assigned the role of reviewing the order and providing prioritized guidance for 401(k) plans within six months.
Interestingly, the bill was introduced despite the ongoing US government shutdown. This was made possible because Congress can bring up and still discuss legislation during a funding gap.
Meanwhile, it is worth noting that the push to incorporate alternative assets, including cryptocurrencies, into US retirement accounts has been gaining momentum over the past few months.
Trump’s executive order sparks controversy among individuals
Concerning Trump’s executive order, the US Department of Labor withdrew the Biden administration’s previous guidance to fiduciaries in May. This guidance encouraged fiduciaries to exercise extreme caution when adding crypto exposure to 401(k) retirement plans.
No sooner had Trump issued his executive order than, in September, nine members of Congress from the US wrote a letter to SEC Chair Paul Atkins. In this letter, they called for the agency to accelerate the implementation of the order and assist 90 million Americans currently locked out of investing in alternative assets, enabling them to secure a dignified and comfortable retirement.
The 401(k) plan is one of the widespread retirement savings programs employers offer, particularly in the US. To support this claim, reports from the Investment Company Institute (ICI) regarding the US retirement market in the second quarter of this year illustrated that Americans had saved around $9.3 trillion in their 401(k) accounts by June 30.
While some financial professionals believe that using retirement savings to invest in crypto and digital assets is risky, several individuals in the cryptocurrency community support the idea.
An example is André Dragosch, the head of European research at Bitwise, who in August stated that integrating cryptocurrency into US retirement plans could be a game-changer for Bitcoin adoption and potentially introduce billions of dollars’ worth of new investment.
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Source: https://www.cryptopolitan.com/us-bill-to-make-executive-order-into-law/