Crypto in 401(k)? A deadline for crypto exchange? There are bills for that.

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(Kitco News) – Legislative activity related to cryptocurrencies in the United States is increasing as the global push to establish a regulatory framework for crypto and the launch of central bank digital currencies (CBDC) continues to intensify.

In the US Senate, a new bill has been introduced by Senator Bill Hagerty (R-Tenn.) that proposes the creation of a safe harbor for cryptocurrency exchanges that would otherwise face legal consequences for listing unregistered securities.

The text of the bill appears to establish a two-year grace period for crypto exchanges that would protect them from enforcement actions by the Securities and Exchange Commission (SEC) for listing tokens deemed to be unregistered securities by the regulatory body. The beginning of the grace period starts when the commission has made an official decision that a symbol is considered an unregistered security.

The bill also stipulates that stock exchanges will not be subject to legal action for failure to register as a broker-dealer or national stock exchange during the grace period.

Ultimately, however, all exchanges listing tokens determined to be securities will be required to register as broker-dealers or national securities exchanges.

In the event the bill becomes law, the SEC would still be able to label tokens as unregistered securities via rulemaking, pronouncements and enforcement actions, but the Commodity Futures Trading Commission would have the right to object. Exchanges can also sue to appeal any decisions in court, where a judge is then tasked with deciding the security status.

The bill faces a tough road ahead; But with a limited amount of time left in the current legislative session, the chances of it passing anytime soon are diminishing.

Cryptos in 401(k)

Separate legislation recently introduced by three congressional Republicans looks to expand the types of investments managers of 401(k)s and other savings plans can make, including the ability to invest in digital assets.

The bill, called “The Retirement Savings Modernization Act,” would also allow financial advisors to recommend cryptocurrencies, along with other traditional investment vehicles such as private equity or hedge funds, without legal liability.

Outgoing Senate Banking Committee Ranking Member Pat Toomey (R-Pa.), Sen. Tim Scott (RS.C.), and Rep. Peter Meijer (R-Mich.) is sponsoring the bill. Statements made by members of Congress with the bill’s introduction cited inflation and “fiscal uncertainty” as the motivation for expanding retirement investment options.

Limits on 401(k) investments were also criticized for reducing overall returns compared to traditional pensions despite the fact that far more Americans rely on 401(k)s than traditional pensions for their retirement needs.

“Our legislation will give the millions of American savers invested in defined contribution plans the opportunity to grow their retirement savings through access to the same broad range of alternative assets currently available to savers with defined benefit plans,” said Senator Toomey.

The fate of this bill remains up in the air; But as Toomey is not running for re-election and Meijer recently lost the primary to Republican challenger Jonh Gibbs. There is still the possibility that the bill can be included in a broader year-end, but that remains to be seen.