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- The proposal implements President Trump’s order last year to expand access to alternative 401(k) assets.
- Few retirement plans offer alternatives, and even fewer maintain them, the Labor Department said.
- Decrypt was told the rule clears the legal path but leaves operational hurdles and unresolved questions about the request.
The U.S. Department of Labor has issued a proposed rule that would give 401(k) fiduciaries a safe harbor when considering alternative investments, including funds that invest in cryptocurrencies and other digital assets.
under an offerfiduciaries subject to review of performance, fees, liquidity, assessment, measurement and complexity will receive a safe harbor if they follow this process. It was released for public inspection through the Federal Register on Monday and is scheduled to be officially published by Tuesday.
The proposed rule implements a Guidance From President Donald Trump in August last year to Expand access To alternative assets in 401(k) plans, including investment vehicles with exposure to cryptocurrencies.
Americans have nearly $10.1 trillion in 401(k) plans as of the end of 2025, part of a broader $14.2 trillion defined contributions market, according to Data From the Investment Company Institute.
Drawing for the elderly Datathe Department of Labor pegs the participant-directed market at $8.8 trillion across nearly 721,000 plans.
Only 4% of defined contribution plans offered alternative investments last year, with just 0.1% of assets allocated to them, according to data cited in the proposal.
Safe haven, tough choices
This proposal comes in the wake of the Ministry of Labor’s decision last May to Cancel Biden-era guidelines that urged fiduciaries to exercise “extreme caution” before adding cryptocurrencies to 401(k) rolls, a standard the agency said goes beyond what is required by federal law governing retirement plans.
“Retirement funds are the holy grail for bitcoin enthusiasts looking for new investors: oceans of cash, with tax advantages,” said Andrew M. Bailey, a senior fellow at the Bitcoin Policy Institute. Decryption.
Bailey noted that retirement plans carry internal tension.
“Their horizons — decades, not months or years — make them well-suited for long-term investment in new technologies,” he said. “Their approach to risk and stringent regulations pulls them in the opposite direction.”
He said that while risk aversion could “drive pensioners away”, rule changes “that enable savers to make their own choices” would be welcome.
Once the rules are settled, Bailey argues, the tougher question is whether savers will actually bite.
“A secondary influence to watch is equity-based investment vehicles for Bitcoin, such as Strategy’s preferred stock offerings,” Bailey said. Whether direct 401(k) exposure would be unbundled He asks He noted that such products or proof of their integrity remains an open question.
The proposal puts digital assets “on the same playing field” as other alternative investments, said Joshua Chow, a lawyer, lecturer and co-chair of the Hong Kong Web3 Association. Decryption.
“If a fiduciary can document a robust process around fees, liquidity, valuation and complexity, they will now have a clear roadmap to safe harbor rather than a regulatory minefield,” he said.
Through it, retirement savers can get “a taste of alpha for alternative assets without the plan sponsor hiding under the desk every time Bitcoin sneezes,” he added.
However, fiduciaries will need to build “day-to-day pricing, liquidity, and risk controls” for cryptocurrencies inside 401(k) wrappers before any of it reaches a retiree’s account, he added.
The proposal could put American retirees ahead of most Asian savers in accessing regulated exposure to cryptocurrencies, Chu noted, noting how Hong Kong’s pension system and China’s trade ban still keep digital assets out of retirement accounts.
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