The U.S. Department of Labor said it has “serious concerns” about Fidelity Investments’ plan to provide clients with the ability to accumulate Bitcoin in their 401(k) retirement accounts. The Wall Street Journal reports.
On April 29, officials will discuss the matter with representatives of the financial corporation.
Three days earlier Fidelity announced that the option would be available in the summer of 2022. It would be available to employees at about 23,000 companies, whose retirement plans managed by the company total $2.7 trillion. The share of Bitcoin in the portfolio would be capped at 20%.
The proposal has already drawn the attention of MicroStrategy CEO Michael Saylor. In an interview with CNBC, he called Bitcoin a less risky asset compared with bonds, equities, commercial real estate and gold.
“There has been a lot of hype around Bitcoin”, said Ali Havar, acting assistant secretary of the Department of Labor’s Employee Benefits Security Administration.
The official is concerned about Bitcoin’s inherent volatility and the risks for ordinary Americans. Havar stressed that the agency does not ban cryptocurrency on 401(k) accounts.
If employers believe they have taken the agency’s concerns into account — that’s their decision, he added.
On April 10, the U.S. Department of Labor warned that it could direct employers to ensure such plans meet prudence and loyalty criteria. Industry participants, including Fidelity, urged withdrawal of such guidance.
In response to the April 28 statement the company said that the proposal to add Bitcoin to retirement accounts “…reflects the view that digital assets will represent a large part of the future of the financial industry”.
Back in November 2019, Fidelity Investments launched an institutional-focused crypto custody service.
In 2020, US pension plans offering investments in Bitcoin were introduced by DAiM, as well as Bitwage with Gemini.
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