Retirement money investment in the digital assets of the Treasury Bold is not proposed “to most people” by the head of the Treasury.
Janet Yellen, the US Treasury Secretary, weighed in on including cryptocurrencies in retirement plans, calling them a very risky investment that should be regulated by Congress.
During an event hosted by the New York Times in Washington on Thursday, Yellen shared her views on pioneering efforts to include crypto in retirement plans adopted by Fidelity Investments:
“It’s not something that I would recommend to most people who are saving for their retirement. To me, it’s a very risky investment.”
The debate around digital currencies in 401(k) plans saw the involvement of the Department of Labor and senators Elizabeth Warren, Tommy Tuberville, and Cynthia Lummis.
Yellen went so far as to say that Congress could control the type of resources that could be included in retirement programs:
“I’m not saying I recommend it, but that, to my mind, would be a reasonable thing.”
The last statement is important in the context of legal uncertainty that has been following the crypto issue as a retirement investment from the very beginning. 401 (k) Investments under the Employees Retirement Income Security Act, 1974 It does not specify which asset classes may or may not be included in the 401 (k), but it does compel trustworthy individuals to “show the care, skill, prudence and diligence that a prudent person would exercise.”
In April, Fidelity announced that it would allow 401 (k) retirement savings account holders to invest directly in Bitcoin (BTC). The United States Department of Labor (DOL) has responded with a compliance report threatening legal action. Meanwhile, senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota have asked the firm to answer questions about how they plan to address the risks set by the DOL.
In the meantime, Alabama Senator Tommy Tuberville has revealed a “Financial Freedom Act” to allow investors to add cryptocurrencies to their 401 (k) retirement savings plans, and Wyoming Senator Cynthia Lummis has tweaked 401 (k) to legalize cryptocurrencies as part of her long-awaited crypto bill.
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