In a historic first, investors in the U.S. are being allowed to engage with alternative assets like cryptocurrency, real estate, and private equity as part of their 401(k) retirement plans. President Donald Trump has signed an executive order finalizing the development, the White House announced on Thursday, August 7.
“More than 90 million Americans participate in employer-sponsored defined-contribution plans, and most of those are currently restricted from investing in alternative assets,” the statement from the White House said. “President Trump wants to give American workers more investment options in order to attain stronger and more financially secure retirement outcomes.”
The executive order has directed the U.S. Secretary of Labor to review its existing guidance on a fiduciary’s responsibilities for including alternative assets in 401(k) plans.
The instruction will have the Labor Department re-assess its stance on these alternate assets. Subsequently, fiduciaries like financial advisors will have to conduct careful research to ensure that alternative assets are suitable for the plan and for its participants.
Furthermore, President Trump has directed the Secretary of Labor to work with the Securities and Exchange Commission (SEC) as well as the Secretary of the Treasury to analyze if other regulatory changes are required to give effect to the purpose of the executive order.
Under the directives, the SEC has been tasked with simplifying the process for people to invest in alternative assets via their retirement accounts.
Crypto players including Coinbase, Binance, Kraken, and OKX among others have lauded the development on social media.
“President Trump promised to make the United States the ‘crypto capital of the world,’ emphasizing the need to embrace digital assets to drive economic growth and technological leadership. Through tax cuts and deregulation, President Trump is delivering on his promise to make America wealthy again,” the order asserted.