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The U.S. Department of Labor has "grave concerns" over the inclusion of crypto, including , in American retirement accounts.
Days after Fidelity opened its retirement accounts to Bitcoin, the acting assistant secretary of the Employee Benefits Security Administration (EBSA) Ali Khawar told the Wall Street Journal, “we have grave concerns with what Fidelity has done.”
The EBSA is an agency within the Department of Labor that oversees employer-sponsored retirement plans in the United States.
On Tuesday, the financial services firm announced that it would let members of its 401(k) retirement savings program invest up to 20% in the leading cryptocurrency.
The product is expected to lunch this summer, with tech firm MicroStrategy, led by Bitcoin bull Michael Saylor, being the first firm to join.
“We started to hear a growing interest from plan sponsors, organically, as to how could Bitcoin or how could digital assets be offered in a retirement plan,” Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments, told the New York Times at the time.
This is not the first time the Department of Labor has shared concerns about including cryptocurrencies in American retirement accounts.
In March, it cited the asset class’s volatility, participants' ability to make “informed” decisions about crypto, and a shaky regulatory environment, among other reasons why participants should exercise caution over including them in their portfolios.
“The Department cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants,” read the release.
Retiring on Bitcoin
Last year, crypto exchange and 401(k) provider ForUsAll announced a similar crypto-fueled retirement option.
The assets available extend far beyond Bitcoin, including tokens like (ALGO) and (UNI). Still, the crypto allocation was restricted to 5% of a portfolio.
Earlier this year, iTrustCapital raised $125 million to expand its crypto IRA offering. Like a 401(k) plan, IRA retirement accounts offer tax-advantaged investing though the amount participants can contribute is much smaller.
With Fidelity now entering the space, adding crypto to retirement portfolios may have finally reached the mainstream.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.