Sources indicate that US President Trump is preparing to sign an executive order that might broaden investment options for American 401(k) retirement accounts. The order could potentially allow these plans to include alternative assets like digital currencies, moving beyond the traditional stocks and bonds.
According to a Thursday report in the Financial Times, which cited information from individuals familiar with the plans, the executive order could be signed this week.
If implemented, the revised investment options could encompass a wide variety of assets. These could include digital assets, precious metals, and investment vehicles focused on infrastructure projects, corporate acquisitions, and privately issued loans.
The Financial Times reported that the executive order would direct federal regulatory bodies to analyze the optimal strategies for incorporating crypto investments into 401(k) plans, as well as investigate any existing hurdles preventing this from occurring.
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Trump’s Approval is Crucial for Final Implementation
However, White House representative Kush Desai communicated to Cointelegraph that any declarations should be regarded as preliminary until confirmed by President Trump.
He stated, “President Trump remains dedicated to bolstering prosperity for everyday citizens in America, and safeguarding their financial well-being.”
“No decisions should be deemed official, however, unless they come from President Trump himself.”
Earlier this year, in May, the U.S. Department of Labor withdrew a prior directive from the Biden administration, which had placed restrictions on cryptocurrency inclusion in 401(k) programs.
In April, Cointelegraph reported on the launch of a new retirement account by Fidelity, a financial firm overseeing $5.9 trillion in assets. This account enables individuals to allocate funds into cryptocurrency.
Standard 401(k)s Primarily Focus on Stocks and Bonds
A 401(k) represents a retirement savings initiative provided by numerous U.S. companies, enabling employees to invest pre-tax earnings.
Generally, these plans direct investments into mutual funds, exchange-traded funds (ETFs), stocks, and bonds, dependent on the specific plan’s structure. As of September 30, 2024, the 401(k) sector held $8.9 trillion across 715,000+ plans.
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Earlier in March, in North Carolina, state legislators introduced legislation in both the House and Senate potentially permitting the state treasurer to allocate up to 5% of the state’s retirement funds to cryptocurrencies, such as Bitcoin (BTC).
International Interest in Crypto within Retirement Funds
Last November, Cartwright, a UK-based pension advisory firm, reported that an “unnamed scheme” had assigned 3% of its portfolio to Bitcoin.
Furthermore, Japan’s Government Pension Investment Fund weighed the addition of Bitcoin for diversification purposes as early as March of the previous year.
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