The Labor Department lifted restrictions that previously discouraged the inclusion of cryptocurrencies in 401(k) retirement plans on Wednesday.
What Happened: The Department of Labor’s Employee Benefits Security Administration rescinded a Biden-era guidance that had urged plan fiduciaries to exercise “extreme care” before adding cryptocurrency to investment menus, marking a return to the department’s “historically neutral” position on such investments.
“By rescinding the 2022 guidance, the department reaffirms its neutral stance, neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan’s investment menu is appropriate,” a statement from the release said.
Why It Matters: The Labor Department under former President Joe Biden had warned about “significant risks” of adding cryptocurrency investment options to retirement plans, citing the speculative and volatile nature of the asset class.
This policy shift comes a month after leading brokerage firm Fidelity Investments introduced a new crypto-focused retirement account, giving individual investors the opportunity to hold assets like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Litecoin (CRYPTO: LTC) directly in tax-advantaged retirement portfolios.
Price Action: At the time of writing, BTC was exchanging hands at $108,079.87, down 0.72% in the last 24 hours, according to data from Benzinga Pro.
Photo Courtesy: Tada Images on Shutterstock.com
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