The US Department of Labor has announced that it is rescinding its 2022 guidance on cryptocurrency investments in 401(k) plans. This decision could lead to significant changes in the retirement investment landscape.
Change in the Department of Labor's Position
The Department formally reversed its 2022 guidance that advised fiduciaries against adding cryptocurrency to retirement plans. This action reflects a return to a neutral stance on investment options, removing previous restrictions.
Potential Rise in Crypto Investments for Retirement Funds
This reversal may lead to increased institutional adoption of digital assets and more opportunities for individuals to incorporate cryptocurrency into their retirement savings. By removing previous regulatory barriers, the Department facilitates investment decisions in retirement plans.
2022 Guidance: Anomaly or New Normal?
Experts from the Wagner Law Group note that the 2022 guidance was an anomaly deviating from the Department's neutral approach. The return to neutrality aligns with historical fiduciary investment standards and allows for innovation under a regulated fiduciary framework.
The rescindment of guidance may significantly impact the retirement investment market, leading to greater inclusivity of digital assets and their use in retirement savings.
