Exclusive: Trump Administration Considers Executive Order Expanding 401(k) Investments to Cryptocurrency

WASHINGTON — The Financial Times (FT), citing three individuals briefed on the plans, reports US President Donald Trump is poised to sign an executive order that could significantly alter US retirement investing. The potential measure aims to authorize 401(k) plans to invest in a range of alternative assets, including cryptocurrencies.

According to the FT, the executive order, which could be signed this week, would instruct federal regulatory agencies to explore permissible paths for 401(k) plans to invest in digital assets. It would also examine and remove any obstacles preventing such diversification.

Scope of Potential New Investments

The potential order’s draft requires agencies to study how 401(k) plans could invest in a “broad spectrum” of assets beyond traditional stocks and bonds. This includes exposure to “infrastructure deals, private equity, private credit, commodities and metals,” the FT noted.

Pre-Tribunal Confirmation

However, as of Tuesday, emboldening statements from the White House, a presidential spokesperson emphasized the need for direct presidential endorsement.

“President Trump is committed to restoring prosperity for everyday Americans and safeguarding their economic future. No decisions should be deemed official, however, unless they come from President Trump himself,” stated Kush Desai in a statement provided to Cointelegraph.

Recent Regulatory Shift

Making administrative changes clearer, in May the Department of Labor rescinded previous guidance issued under the Biden administration that would have limited the inclusion of cryptocurrency within 401(k) plans. This move eased one hurdle analysts believed existed against the executive order.

Private Sector Involvement

Private financial institutions also recently took steps, pointing to potential industry accommodation. In April, Cointelegraph reported that global asset manager Fidelity Investments — which manages $5.9 trillion across multiple asset classes nationwide — indicated it would soon offer a distinct, new retirement account facilitating cryptocurrency investing for eligible retirement fund participants.

The Standard 401(k) Framework

Standard 401(k) arrangements — employer-sponsored retirement savings vehicles mandatory in certified plans — typically direct investments toward Mutual Funds, Exchange-Traded Funds, various stocks, and bonds selected from the plan’s investment menu. Employees contribute pre-tax dollars; a significant portion of America’s older citizens rely on 401(k) funds directed toward retirement.

Industry data indicated the universe of assets within standard 401(k) plans stood approximately at $8.9 trillion across 715,000 different plans as of Sept. 30, 2024.

State and Global Developments

US State Level Activity

At the state level, several US legislatures have advanced ideas involving cryptocurrency allocation. For example, in March, North Carolina lawmakers proposed bills authorizing the state’s retirement funds to hold up to 5% in various cryptocurrencies including Bitcoin (BTC).

International Pioneers

Different nations are examining cryptocurrency’s inclusion in retirement vehicles. Last November, pension advisors in the UK cited a case involving a specific plan that allocated a small portion of its pension fund (3%) to Bitcoin.

Earlier this year, looking back to March 2023, Japan considered diversification measures involving Government Pension Investment Fund (GPIF) holdings, in part looking at Bitcoin as an alternative asset, though a finalized decision has not been announced or confirmed by official channels.