The Department of Labor (DOL) rescinded guidance from 2022, allowing fiduciaries to decide on including cryptocurrency in investment offerings without extreme restrictions. Secretary Lori Chavez-DeRemer criticized previous overreach, emphasizing that investment decisions should rest with fiduciaries. Recent data from the Government Accountability Office indicated that crypto assets represent a small portion of the 401(k) market, with 69 available options, which may grow following SEC approval for Bitcoin ETFs. However, fiduciaries are cautious about volatility in retirement plans. Arizona Governor Katie Hobbs vetoed a bill allowing substantial state investment in cryptocurrencies, advocating for tested investments instead.
The Biden administration's department of labor made a choice to put their thumb on the scale, DOL Secretary Lori Chavez-DeRemer said at the time. We're rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.
The GAO identified 69 crypto options available to 401(k) participants. This number could grow after the Securities and Exchange Commission approved the use of Bitcoin exchange-traded funds (ETFs), allowing for easier buying and selling on major investment platforms.
But there might be some reluctance, given fiduciary considerations, about whether it is prudent to offer something with such volatility within retirement plans.
Hobbs said at the time that Arizonans' retirement funds are not the place for the state to try untested investments like virtual currency.
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