The US Labor Department is making a U-turn from its previous stance against the inclusion of Bitcoin and cryptocurrencies in retirement plans. Going forward, the Labor Department will adopt a neutral position toward cryptocurrencies, potentially opening the floodgates for fiduciaries to include them in 401(K) plans.
US Labor Department Is Not Against Bitcoin In 401(K) Plans
According to a press release, the US Department of Labour is changing its position on the inclusion of cryptocurrency options in 401(K) retirement plans. The US Labor Department is rescinding its previous 2022 guidance that warned fiduciaries of the dangers of offering Bitcoin and cryptocurrencies in retirement plans.
At the time, the Labor Department urged fiduciaries to take “extreme care” in offering cryptocurrency options to investors. While not expressly banning their inclusion, the dire warnings by the Labor Department stifled cryptocurrency offerings in the investment menus offered by fiduciaries.
“We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats,” said US Secretary of Labor Lori Chavez-DeRemer.
Chavez-DeRemer adds that the 2022 guidance contravenes the Department’s neutral stance toward investments. Furthermore, the 2022 guidance violates the provisions of the Employee Retirement Income Security Act.
Going forward, the US Labor Department will take a neutral position, neither criticizing nor approving Bitcoin’s inclusion in retirement plans. Data and comments from the Labour Department have historically affected BTC’s price, with the recently released US PPI inflation data dousing hopes of a Bitcoin rally.
US Government Agencies Are Warming Up Toward Cryptocurrencies
Despite the 2022 guidance against Bitcoin and crypto investments in 401(K) plans, several state-level pension funds continue to embrace the offering. Bitcoin ETFs appear to be the investment vehicle of choice for pension funds, with funds in Michigan and Wisconsin investing in them.
Furthermore, the passing of a Strategic Bitcoin Reserve bill in Texas and New Hampshire will see state pension funds allocate more funds into Bitcoin.
Since the start of the Trump administration, several government agencies have adopted a friendly stance toward cryptocurrencies. The Office of the Comptroller of the Currency (OCC) rolled back its guidance to allow federal banks to dabble in cryptocurrency transactions.
Furthermore, the US SEC is joining the laundry list of government agencies, fueled by new leadership at the helm of affairs. The SEC has shuttered its cases against top crypto service providers and is hurtling toward regulatory clarity. In a strong show of commitment, the SEC is holding a series of crypto roundtables with key sector player to chart a clear regulatory direction.
Aliyu Pokima
Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he’s not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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