Congress Demands SEC Update Rules to Include Crypto in 401(k) Plans
Lawmakers are turning up the heat on regulators—pushing for a retirement revolution that could funnel billions into digital assets.
The Regulatory Pressure Cooker
A bipartisan coalition in Congress is applying direct pressure on the Securities and Exchange Commission. Their target? Outdated rules that currently block cryptocurrencies from being included in mainstream 401(k) retirement plans. This isn't a gentle suggestion—it's a coordinated push to force regulatory modernization.
The Retirement Account Gold Rush
Imagine the floodgates opening. 401(k) plans represent one of the largest pools of capital in the United States. Allowing crypto allocations would provide institutional-scale legitimacy and a massive, steady inflow of capital into the asset class. It transforms digital assets from speculative fringe holdings into core retirement portfolio components.
The Custody Conundrum
The SEC's hesitation traditionally stems from custody and volatility concerns. Critics argue the agency moves at a bureaucratic pace while technology gallops ahead. The congressional push aims to cut through that inertia, demanding frameworks that address security without stifling innovation—because apparently, watching paint dry is a faster process than waiting for some regulatory updates.
A Defining Moment for Mainstream Adoption
This fight goes beyond a single rule change. It's a battle for the financial soul of the next generation's retirement. Success here doesn't just add an investment option; it signals a fundamental shift in how regulators and traditional finance view the entire crypto ecosystem. The outcome could either unlock a new era of investor choice or reinforce the walls of the traditional financial fortress—proving once again that in finance, 'innovation' is often just a fancy word for something old guards wish would go away.
Lawmakers push SEC to act on Trump’s retirement order
The House Financial Committee’s push follows directly on the heels of an executive order signed by U.S. President Donald TRUMP in August 2025. The order, titled “Democratizing Access to Alternative Assets for 401(k) Investors,” requires federal agencies to expand the investable choices available to retirement planners.
It emphasizes that every American should be able to invest in alternative assets when it makes financial sense. It also notes that fiduciaries must assess risks, managers’ experience, and suitability before such choices are included in retirement plans.
Notably, cryptocurrencies were specifically listed alongside real estate and private equity. This marked one of the most significant federal acknowledgments of digital assets as legitimate investment choices.
In their letter, lawmakers praised the WHITE House directive. They said the SEC must now take parallel action to ensure the policy becomes reality. They also highlighted the need to redefine who qualifies as an “accredited investor.”
Strict rules about investor qualification currently restrict involvement in certain private and alternative investment markets. This program is often only available to wealthy or high-net-worth individuals. And Congress now wants to expand those rules to people with professional licenses, related job experience, or those who can pass a competency exam.
These changes WOULD ensure that a wider spectrum of workers, including teachers, nurses, engineers, and skilled laborers, would have access to investments that were once only available to wealthy Americans.
The lawmakers also said the SEC should coordinate with the Department of Labor, which oversees retirement plan fiduciaries, to agree on the rules. Both agencies, they said, needed to figure out a way to safely and responsibly add alternative assets into 401(k) menus.
SEC signals a shift in how crypto will be regulated
The SEC has been more open on digital assets already under Chair Paul Atkins. He has abandoned the previous aggressive enforcement approach and initiated additional initiatives to clarify regulations. One of his significant projects is “Project Crypto,” a program he has developed to establish the classification, trading, and storage of digital assets.
Atkins has stated in recent public remarks that a significant percentage of the cryptocurrencies traded on the market today are not securities. This distinction matters especially because, not being classified as securities, assets are subject to fewer restrictions and can be more readily included in retirement plans.
The SEC is also considering sweeping reforms that might update the review, approval, and oversight of investment products.
The official guidance includes investor protections, as well as clear disclosures for investors who may buy cryptocurrencies, and safeguards for retirement savers, officials say. Supporters say that if the changes become official, crypto-investing retirement options could gain traction.
Digital assets will be included in standard 401(k) lineups alongside mutual funds and ETFs, at least until they are fully integrated into the market. However, critics argue that this move is risky. They say cryptocurrencies are prone to extreme price fluctuations and could expose retirees to unpredictable losses. Skeptics have warned that many workers do not fully understand the fluctuation seen in crypto markets.
Even so, momentum is emerging. Companies that provide retirement solutions have seen an uptick in interest among younger workers who want digital assets integrated into their long-term savings plans. The move to include bitcoin in 401(k) plans may push the asset to new highs.
Get up to $30,050 in trading rewards when you join Bybit today
