7 days ago
Bitcoin and XRP could potentially be included in 401(k) plans
Bitcoin and XRP could potentially be included in 401(k) plans originally appeared on TheStreet.
The U.S. Department of Labor has withdrawn its 2022 guidance that warned fiduciaries against including cryptocurrency in 401(k) retirement savings plans, the Department's Employee Benefits Security Administration announced on May 28.
The 2022 guidance urged fiduciaries to exercise 'extreme care' while they consider adding a crypto option to a 401(k) retirement plan for participants.
The Employee Retirement Income Security Act (ERISA) doesn't mention the 'extreme care' standard, so the 2022 directive marked a departure from ordinary fiduciary principles, the Labor Department noted.
Jackson Chainwright, a pseudonymous crypto strategist and Substack author, said the move could quietly mark a turning point for crypto in retirement planning.
'This won't make headlines like an ETF approval, but it opens the backdoor. Fiduciaries now have less reason to avoid crypto, and that's going to matter when the next bull cycle makes Bitcoin and XRP too big to ignore.'
Prior to 2022, the Labor Department usually articulated a "neutral approach" to particular investment types and strategies. The latest withdrawal of the 2022 guidance makes a return to the department's historically principled approach — neither endorsing nor disapproving of any fiduciaries planning to include crypto assets in a 401(k) plan.
ERISA nonetheless requires a fiduciary to curate a plan's investment menu to maximize risk-adjusted financial returns to the plan's participants and beneficiaries.
'The Biden administration's department of labor made a choice to put their thumb on the scale,' Labor Secretary Lori Chavez-DeRemer said in a statement. 'We're rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats.'
Earlier, the department asked fiduciaries to be cautious while considering crypto for 401(k) plans because of an array of reasons, such as the Securities and Exchange Commission (SEC) identifying crypto as "speculative and volatile investments," plan participants finding it difficult to make informed investment decisions, custody concerns, crypto valuations, regulatory concerns, etc.
Matt Hougan, CIO at Bitwise, pointed out that the $9 trillion sitting in U.S. 401(k) accounts currently has near-zero crypto exposure.
'That will change,' he wrote on X, hinting at a coming shift in retirement investing.
Bitcoin and XRP could potentially be included in 401(k) plans first appeared on TheStreet on May 29, 2025
This story was originally reported by TheStreet on May 29, 2025, where it first appeared.
