The U.S. Department of Labor has proposed a rule change aimed at expanding investment options in 401(k) retirement plans to include cryptocurrency, bringing the country closer to implementing President Donald Trump’s August executive order.
A notice for the proposal, titled “Fiduciary Duties In Selecting Designated Investment Alternatives,” appeared on the Federal Register Monday. A pre-publish version outlines the factors retirement plan managers should consider when incorporating crypto and other alternative assets into client portfolios.
The draft defines 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.”
If finalized, the rule could open trillions of dollars in retirement capital to the digital asset sector, further legitimizing crypto as a mainstream investment and encouraging greater 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.”
“This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families.”
The Labor Department’s proposal brings the U.S. a step closer to implementing President Trump’s August executive order, which directed the Labor Department, SEC, and Treasury to expand 401(k) investment options and update related regulations.
SEC Chair Paul Atkins emphasized Monday that broadening American investors’ access to well-diversified, long-term investments that leverage innovation and economic growth is a “critical priority for effective retirement planning.”
Wall Street Recommends Small Crypto Allocations
Morgan Stanley, which has actively expanded into crypto this year, advised its 16,000 financial advisers—who manage $6.2 trillion in client assets—that they can recommend crypto investments. In October, the firm suggested allocating 2% to 4% of client portfolios to crypto.
BlackRock, the world’s largest asset manager, recommends a more conservative 1% to 2% allocation for investors seeking diversified portfolios.
