What happened?
US lawmakers are urging the Securities and Exchange Commission (SEC) to implement President Donald Trump’s executive order opening the $12.5 trillion 401(k) retirement market to alternative assets, including cryptocurrency. The order calls for a revision of rules that would allow FINRA-certified professionals to become accredited investors and provide more people access to alternative assets within their retirement plans.
Who does this affect?
This change affects more than 90 million Americans currently participating in employer-sponsored defined contribution plans. Additionally, the cryptocurrency sector could see a significant increase in capital inflows if digital assets are included in retirement plans, marking an important milestone towards mainstream adoption.
Why does this matter?
The potential inclusion of digital assets in retirement plans could lead to a substantial increase in capital inflows into the cryptocurrency market, diversifying portfolios and meeting the investment needs of the evolving economy. Moreover, broadening investment choices for retirement plans may enhance net risk-adjusted returns and modernize retirement investment strategies, thereby potentially augmenting future retirement incomes for millions of Americans.