tl;dr
The U.S. Department of Labor has rescinded its 2022 guidance that discouraged fiduciaries from including cryptocurrencies like Bitcoin in 401(k) plans, citing concerns over speculation, price volatility, custody, and regulation. The new stance neither encourages nor discourages crypto investments in...
The U.S. Department of Labor (DOL) has rescinded its 2022 guidance that discouraged including cryptocurrencies like Bitcoin in 401(k) retirement plans. Previously, the DOL urged fiduciaries to exercise "extreme care," citing the speculative nature, price volatility, custody challenges, and regulatory uncertainties surrounding digital assets.
With the new stance, fiduciaries can now consider cryptocurrency investments without facing additional scrutiny. The updated policy neither encourages nor discourages the inclusion of crypto in retirement plans, marking a neutral but significant shift.
Labor Secretary Lori Chavez-DeRemer, confirmed in March, criticized the former guidance as federal overreach, signaling a more open approach toward digital assets. Although this change doesn't guarantee immediate adoption of cryptocurrencies in all 401(k) plans, it represents a meaningful step in legitimizing the crypto industry within mainstream retirement investing.
To contextualize, American retirement plans hold over $7 trillion in assets, making this policy reversal highly impactful for the future of crypto investments in retirement portfolios. Notably, Fidelity allowed employers to include Bitcoin in their 401(k) offerings as early as 2022, illustrating early adoption in the financial sector.