The US Department of Labor has proposed a rule change to expand investment options in 401(k) retirement plans to include cryptocurrencies and other digital assets, advancing implementation of President Donald Trump’s August executive order directing federal agencies to widen 401(k) investment choices.
A notice for the proposal, titled “Fiduciary Duties In Selecting Designated Investment Alternatives,” appeared on the Federal Register with a pre-publish version outlining factors retirement plan fiduciaries should consider when adding crypto and other alternative investments. The draft describes digital assets as “a new form of investing that includes a wide variety of assets that can be stored and transmitted digitally, including cryptocurrencies such as bitcoin and other tokens.”
The proposal could channel trillions in retirement capital into the digital-asset sector, bolstering mainstream acceptance and increasing institutional participation. Labor Secretary Lori Chavez-DeRemer said the “proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today,” adding that greater diversity will “drive innovation and result in a major win for American workers, retirees, and their families.”
The move advances steps called for in Trump’s executive order, which instructed the Labor Department, Securities and Exchange Commission, and Treasury Department to expand 401(k) investment options and revise related rules. SEC Chair Paul Atkins said broadening access to well-diversified, long-term investments that harness innovation and growth is a “critical priority for effective retirement planning.”
Institutional players have begun recommending small crypto allocations for diversified portfolios. Morgan Stanley informed its roughly 16,000 financial advisers—who manage about $6.2 trillion in client assets—that they may recommend crypto investments and has suggested conservative allocations of about 2% to 4% to crypto for some investors. BlackRock, the world’s largest asset manager, has recommended a more modest 1% to 2% allocation for diversified portfolios.
Related coverage has noted both the potential benefits and the risks of adding bitcoin and other digital assets to retirement accounts. Cointelegraph is committed to independent, transparent journalism. This article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy