When it comes to saving for retirement, there are different options. However, one that does commonly come to mind is 401(K)s. They are one of the most common options and have lived undisturbed for quite some time. That being the case until now. Here we discover what Congress has planned for Bitcoin, what that means for 401(K)s, and global BTC adoption.
What’s In A 401(K)?
To start things off, let’s define what a 401(K) is. A 401(K), in short, is a retirement plan. It is a standard method used in the United States that employers offer to their employees. They are attractive to potential customers because they provide tax advantages for the participant. Often companies offering this option have a company match up to a certain percentage. Who doesn’t love free money, right?
Congress is the legislative body of the United States government. They are responsible for turning bills into law. The body is composed of two parts, meaning it is bicameral. The lower is the House of Representatives, and the upper we can refer to as the Senate. The entire body makes up a total of 535 members containing 100 senators and 435 representatives.
I’m Just A Bill, On Capitol Hill
Remember, Schoolhouse Rock!? All right then, let’s go ahead and break it down. In the House of Representatives, this is how a bill becomes law and follows these steps. First, the statement begins and is then proposed. After that, it gets introduced, goes to the committee, and gets reported. Finally, it is debated, voted upon, and sent to the Senate.
From there, the bill goes through a similar process in the Senate. It’s where everyone votes verbally. You know, the “yea” or “nay.” Then if the bill goes forward, it is sent to the President. Ultimately being either approved, vetoed, or pocket vetoed.
The Employee Retirement Income Security Act of 1974 is the focal point of the bill in question. It aims, if passed, to amend the Employee Retirement Income Security Act by adding Bitcoin. The Act is also known as the “Retirement Savings Modernization Act.”
The fact that this bill is finally inching closer is exciting enough for many of us. However, for some, it can still leave a sour taste. I.e., big money getting into crypto. I felt the same way early on. But, after some time, I realized the capabilities of decentralization and what this means. For broad-scale global adoption, these two sentiments must come together. Especially to achieve the numbers we will someday reach for price and adoption.
Like it or not, some excellent systems exist already. Here let’s analogize with a building. It seems most plausible that we will keep some of the foundations more than tearing down the entire building, aka our systems, altogether. So effectively, we’re taking pieces out and replacing them as we see fit.
Currently, before Congress, there are 9,633 bills and or resolutions that are in the process loop. Unfortunately, only about 7% of those will ultimately become law. Though that’s better than the survival rate of a baby sea turtle, it’s still not great. However, with this measure being a topic well known and discussed, it has momentum and a chance in the long term. The question begs, can the vocabulary in the bill’s framework satisfy the majority enough?
There are other forces causing pressure to induct more measures that will clarify crypto moving forward. The Financial Stability Oversight Council FSOC is one entity that is pining for that. Being part of the U.S. Department of The Treasury, they assess risks and threats to financial stability.
The executive summary section (1) of the Report on Digital Asset Financial Stability Risks and Regulation 2022 report states. “Crypto-asset activities could pose risks to the stability of the U.S. financial system if their interconnections with the traditional financial system or their overall scale were to grow without adherence to or being paired with appropriate regulation, including enforcement of the existing regulatory structure.”
They explain that parameters are needed. Of course, “appropriate ones.” What does that constitute? We will find out as the months move on ahead. As for this year, we will see what happens. With 2023 around the corner, it will be interesting to see how things progress. While Congress debates back and forth, let’s research, build, and adapt as these changes come. Then, we can pivot and be all the better.