- The Biden Administration in 2022 issued a guidance and urged citizens to act with caution when investing in crypto for 401(k) retirement plans.
- On Wednesday, the U.S. Department of Labor issued a statement rescinding this guidance.
- Trump administration has continuously positioned itself as a crypto friendly government
The Trump Administration is said to have “axed” crypto guidance brought forth in 2022 under the Biden administration asking participants to exercise extreme care before they consider allowing digital assets such as Bitcoin, Ethereum, and even NFTs in retirement portfolios.
The guidance, issued during President Joe Biden’s tenure, cited the speculative and volatile nature of cryptocurrencies and raised concerns about potential fraud, theft, and investor losses.
The U.S. Department of Labor on Wednesday issued a statement reopening doors for Bitcoin and digital assets in employer-sponsored retirement accounts or 401(k) retirement plans.
The Department’s Employee Benefits Security Administration stated that it was returning to its historically neutral stance on investment options under the Employee Retirement Income Security Act (ERISA).
The move fosters a more crypto-friendly regulatory environment.
Meanwhile, highlighting rapidly growing institutional interest in Bitcoin exposure, CalPERS, the largest public pension fund in the United States, made a $276M investment in MicroStrategy Inc. (NASDAQ: MSTR) last week.
Wednesday’s action also aligns with broader signals from the Trump administration, which has taken steps to ease regulatory barriers for the digital asset industry.
President Trump, who has a meme-based cryptocurrency, $TRUMP, has positioned himself as a pro-crypto president. His recently hosted Gala Dinner for his memecoin holders has been the talk of the town.
However, there is also criticism that this move exposes retirement savers to heightened risk in an already complex economy.
Meanwhile, the Labor Department went on to emphasize that the rescission does not constitute the endorsement of cryptocurrency investments. The change is expected to bring about renewed debate among financial advisors, retirement plan sponsors, and regulators over the role of digital assets in long-term investment strategies.
For now, the decision contributes to the momentum to the Trump administration’s broader deregulatory approach toward the crypto economy.