Treasury Secretary Janet Yellen on Thursday warned against including Bitcoin and other cryptocurrencies in retirement plans, calling them a “very risky investment”.
Yellen’s comments came at a New York Times event in Washington, in response to a question about Fidelity’s April announcement that it will let workers save up to 20% of their retirement funds in Bitcoin.
“It’s not something that I would recommend to most people who are saving for their retirement,” she said. “To me, it’s a very risky investment.”
The U.S. Labor Department has previously signaled its opposition to Fidelity allowing Bitcoin in retirement accounts, saying it had “grave concerns” over the decision. But House Republicans last month sought to protect the option with a bill that would prevent a federal ban on crypto retirement savings.
At the event on Thursday, Yellen went on to say that she thought it would be “legitimate” if Congress decided to apply rules to those retirement plans that are granted favorable tax terms.
“The tax laws have created the opportunity to save in tax-advantaged ways,” she said. “If Congress wanted to get involved in legislating in this area and say, ‘we’ve given tax incentives to 401(k)s and retirement plans, and we want to regulate what form that savings can take’, to my mind that would be legitimate. I’m not saying I’m recommending it.”
Yellen and crypto
Yellen’s own attitude to crypto over the years has been mixed. Famously saying she was “not a fan” of Bitcoin in 2018, she more recently conceded that there were some benefits to the technology including innovation.
In the aftermath of the Terra stablecoin UST’s meltdown, she said that crypto poses no systemic risk to the financial system, but also called for Congress to pass stablecoin legislation by the end of this year.