Bipartisan Bid to Expand Retirement Crypto Access Faces Risk Debates

Lawmakers Urge SEC to Open 401 (k)s to Bitcoin and Crypto^[1] A bipartisan group of U.S. House lawmakers, including Financial Services Committee Chairman French Hill (R-AR), Ranking Member Maxine Waters (D-CA), and 14 colleagues, has urged the Securities and Exchange Commission (SEC) to accelerate regulatory changes enabling cryptocurrencies like Bitcoin and Ethereum to be included in 401(k) retirement accounts. The letter, dated September 22, 2025, follows President Donald Trump’s August 7 executive order directing the Department of Labor to revise guidance under the Employee Retirement Income Security Act (ERISA) to expand access to alternative assets in retirement plans. Lawmakers emphasized that the order mandates the SEC and Treasury to collaborate on revising rules governing “accredited investors” and “qualified purchasers,” which currently restrict access to alternative investments for most Americans.

401 (k) savers could see new options, including bitcoin - USA TODAY^[2] The lawmakers argued that integrating cryptocurrencies into 401(k)s could enhance risk-adjusted returns for the 90 million Americans in employer-sponsored retirement plans. They highlighted that public pension systems, such as Michigan’s Retirement System, already hold significant crypto assets—$44 million in Bitcoin and $30 million in Ethereum ETFs as of September 10, 2025—while representing less than 1% of their total $115 billion portfolio. The letter also referenced bipartisan legislation in the 119th Congress aimed at broadening accredited investor criteria, including recognizing professional certifications or SEC-administered exams as qualification pathways.

US Push SEC to Open $12.5T 401k Market to Crypto^[3] The SEC is under pressure to finalize rules that align with the executive order’s directive to modernize retirement investment strategies. Current regulations define accredited investors as individuals with a net worth exceeding $1 million or annual income over $200,000. Expanding these thresholds could unlock access to crypto and private equity for a broader demographic. The lawmakers urged the SEC to incorporate legislative proposals into its rulemaking process, noting that the Trump administration’s prior efforts to liberalize retirement investment options were rolled back under President Biden.

SEC urged by US lawmakers to address Trump’s crypto order on …^[4] The push for crypto inclusion in 401(k)s has sparked debate over risks and benefits. Proponents, including crypto advocates like Detroit’s “Bitcoin Butcher” Ronnie Bedway, argue that younger investors and tech-savvy workers could benefit from exposure to high-growth assets. Conversely, critics, including Boston College’s Alicia Munnell, warn that crypto’s volatility and lack of understanding among average savers make it a “terrible idea” for retirement portfolios. The SEC, under Chair Paul Atkins, has signaled a shift toward collaborative regulation, ending its “regulation by enforcement” approach and prioritizing reforms like semiannual corporate reporting.

The potential impact of the policy change is significant. With U.S. retirement assets exceeding $43.4 trillion as of March 2025, expanding access to alternative investments could redirect trillions into crypto and private equity. The SEC’s role in clarifying fiduciary obligations for plan administrators is critical, as regulators must outline safeguards to protect investors while enabling innovation. The agency is also expected to address high fees associated with alternative investments, which critics argue could erode returns for ordinary savers.

The timeline for implementation remains unclear, but the executive order mandates the Labor Department, in coordination with the SEC and Treasury, to issue clarifications within 180 days. Once regulatory hurdles are cleared, investment firms will develop compliant products, and employers will update retirement plans. The lawmakers emphasized the urgency of swift action, stating that delays could hinder Americans’ ability to diversify their portfolios in an evolving market.

The debate underscores a broader shift in financial markets, where cryptocurrencies are increasingly viewed as a legitimate asset class. While institutional adoption of crypto has grown, its inclusion in mass-market retirement vehicles remains contentious. The outcome of the SEC’s rulemaking process will determine whether 401(k) participants gain access to what lawmakers describe as a “new tool” for wealth-building—or face heightened risks from a volatile and speculative market.