On Friday, President Donald J. Trump signed the GENIUS Act, the first major crypto legislation to become law that will pave the way for bringing massive new digital asset investment choices, including in retirement plans, on Friday. Delivering on a campaign promise to make America the “crypto capital of the world,” President Trump is positioning America as “the global leader in cryptocurrency,” according to the White House.
The Senate last month passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act to regulate stablecoins, followed by the House last week. “The GENIUS Act will make America the undisputed leader in digital assets, bringing massive investment and innovation to our country,” according to a White House statement.
Three years ago, the Department of Labor had “serious concerns,” effectively creating a ban on including crypto in 401(k) plans. But now things are shifting in the opposite direction, with passage of the GENIUS Act that establishes federal guardrails for dollar-denominated stablecoins.
These digital assets, which are pegged to the U.S. dollar to maintain a stable value, would now be on a regulated pathway for private companies to issue digital dollars with the blessing of the federal government.
Companies selling stablecoin assets to investors would be required to maintain robust reserves, adhere to rigorous transparency and anti-money laundering rules, and operate under enhanced regulatory supervision.essentially lessening restrictions on crypto in 401(k) plans.
“President Trump’s signing the GENIUS Act is a monumental step forward for crypto assets, financial markets, and our country …,” said Paul Atkins, chair of the Securities & Exchange Commission. “The SEC will work diligently to consider any changes needed to achieve regulatory clarity. Together we will make America the center of crypto asset innovation and strengthen the financial markets for the benefit of all Americans.”
Last month, the SEC announced that it is withdrawing proposals that would have applied to investment managers regarding crypto custody management.
In January, the SEC launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, naming “CryptoMom” Hester Peirce to lead the new task force. The task force was introduced amid expectations of a shift in the SEC’s approach to crypto under the crypto-friendly Trump administration.
Earlier this month, SEC’s Crypto Task Force announced new guidance on disclosure requirements for exchange-traded funds (ETFs) linked to cryptocurrencies, marking the first step toward approval of applications for ETFs.
The crypto guidance will help speed up the approval process for these ETFs, “as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets,” according to the SEC.
Also, the Department of Labor rolled back its crypto warning in May, which it released three years ago when the DOL had “serious concerns,” effectively creating a ban on including crypto in 401(k) plans.
However, the DOL reaffirmed its neutral stance, neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate, according to a statement.
“We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats,” said Secretary of Labor Lori Chavez-DeRemer.
(Adobe Stock)
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