Following a bombshell revelation of US President Donald Trump rolling back the guidelines for cryptocurrency investment options in 401(k) plans originating in the time when Joe Biden was in charge, there are bound to be some implications for the wider industry.
Indeed, the Trump administration has removed the Biden-era warning of “extreme care” for employers offering crypto as an option to workers in their 401(k) retirement plans, which Labor Secretary Lori Chavez-DeRemer referred to in a statement as the previous administration’s bid against digital assets.
As she explained, her department is neutral on the issue of digital assets – neither approving nor disapproving of their inclusion in retirement plans:
“The Biden administration’s Department of Labor made a choice to put their thumb on the scale. (…) We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats.”
Biden-era 401(k) barrier
Specifically, the 2022 guidance cautioned companies that they could be legally responsible for losses coming from crypto investments they offer without proper research, urging them to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”
Now, the 2025 guidance has scrapped this warning, arguing that its content didn’t reflect the Department of Labor’s historically “neutral approach to particular investment types and strategies.” Still, the guidance advises plan fiduciaries to consider all relevant facts and circumstances when assessing any particular investment type.
What it means for crypto
Removing this warning is another clear message from President Trump who has moved from a stern crypto critic at the start of his first presidential campaign to a full-on enthusiast taking part in crypto conferences and even launching his own digital assets, like the recent TRUMP meme coin.
Now, the updated guidance encourages plan sponsors to freely consider adding crypto assets. However, it might take some time before we see crypto retirement plan options take hold. Specifically, Billy Voyles, president of financial advisory and insurance firm Fundamental Wealth Designs, has opined that, while Trump’s policy “cracks open the door, it doesn’t kick it open.”
“It’s a complicated process to get approvals, get funds created. They are high-risk, too. There will need to be disclosures. It’s a long way until people can access it in their 401(k)s.”
Meanwhile, Rick Miller, a financial planner and investment adviser at Miller Investment Management, has said that the goal of the update is to normalize digital assets, adding that “Crypto is here to stay, but it’s essentially in its infancy,” and recommending that it should make a very small percentage of 401(k) holdings.
On the other hand, some experts believe that crypto has no place in people’s 401(k) lineups to begin with, including Knut Rostad, president of the Institute for the Fiduciary Standard, who has called the move a “big mistake,” that “sends the wrong message by eliminating a yellow caution light and putting in place a green light” for employers and 401(k) investors to add crypto.
What do you think?
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