Senators Pat Toomey, R-PA, and Tim Scott, R-SC, along with Representative Peter Meijer, D-CO, revealed the text of a proposed bill called that “Retirement Savings Modernization Act” last week.

The bill is an amendment to the Employee Retirement Income Security Act, and would clarify that fiduciaries managing defined contribution plans are permitted to invest across all asset classes, and do not have to limit themselves to stocks and bonds.

In a press release issued by Senator Scott, the legislators explained that defined benefit plan investments tend to outperform defined contribution plans, because they invest in a wider range of assets. The release emphasizes private equity and real estate in particular as lucrative investments for defined contribution plans.

The release laments that defined contribution plan fiduciaries are often too cautious to invest in alternative assets when managing defined contribution plans for fear of being subject to ERISA-related litigation for investing imprudently. The legislators cite a study released by Georgetown that estimates that more diversified plans could increase retirement plan value by 17% over the life of the plan and reduce losses in a downturn.

As it stands now, ERISA does not ban investment in alternative asset classes, and so this amendment would not actually the change the law. Instead, the bill is intended to clarify the law for fiduciaries who may be unaware that they can invest in alternative asset classes, or fear being sued solely on that basis. The bill emphasizes that alternative asset classes are not exempt from ERISA’s fiduciary duties of loyalty and prudence, and these asset classes if chosen still have to be chosen through a prudent process.

This legislation is likely informed by growing research that shows that 401(k) plans might benefit from investing in alternative assets, but are cautious of doing so out of fear of ERISA litigation for imprudence.

The bill specifically names the following asset classes: commodities, public and private debt, digital assets, hedge funds, infrastructure, insured products and annuities, private equity, real assets, real estate or real estate related securities, and venture capital.

A number of industry groups, including the Small Business Investor Alliance, Voya Financial, and the American Securities Association, have offered their support for the bill.

Charlie Nelson, the vice-chairman of and chief growth officer at Voya Financial says that the bill “could help a lot of Americans reach their long term retirement goals.” Though the bill does not technically change existing law, it provides useful clarification and “gives comfort to plan sponsors around this topic” and should encourage increased investment in alternative assets in defined contribution plans. Nelson emphasizes that there is a lot of opportunity in alternative assets for defined contribution plans looking to diversify.

Though the legislators emphasize private equity and real estate in their statements regarding the bill, the crypto currency community may stand to gain the most from it. Bitcoin News celebrated the bill and noted that it would apply to crypto and likely encourage investment in it.

Although the bill does not name cryptocurrencies explicitly, it does name “digital assets.” Earlier this year, Fidelity unveiled an investment product called the Digital Assets Account which allows participants to invest in a fund that contains up to 20% bitcoin. This brought criticism from Democratic Senators Elizabeth Warren, Dick Durbin and Tina Smith. They stated in an open letter addressed to Abigail Johnson, the CEO of Fidelity, that Bitcoin is a “volatile, illiquid, and speculative asset” and described the decision to include them in a 401(k) plan as “ill-advised.”

The Department of Labor also cautioned against investment in crypto in 401(k) plans in March. The department warned that fiduciaries should “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.” The Department said that cryptocurrencies are unusually “speculative and volatile” and are more vulnerable to hacking.

Secretary of Labor Marty Walsh also stated that he would be open to more regulation on cryptocurrencies generally, and in retirement plans in particular, in a hearing before the House Education and Labor Committee in June.

In August, the SEC proposed amendment to Form PF, a confidential reporting form required of some investment advisers to help the SEC assess systemic risk in the economy. The amendment clarifies the definition of digital assets as those that are “issued and/or transferred using distributed ledger or blockchain technology” and requires advisers to disclose the value of a fund’s assets held as digital assets.

Charlie Nelson of Voya explains that there is not significant interest in crypto among plan sponsors today and digital assets are “not an area of high demand for retirement plan consultants.”