US Department of Labor Relaxes Guidelines: Crypto Now Allowed in 401(k)!

US Department of Labor Relaxes Guidelines: Crypto Now Allowed in 401(k)!

The U.S. Department of Labor has withdrawn a significant 2022 directive that urged trustees of 401(k) retirement plans to exercise caution when incorporating cryptocurrencies into their investment options. This decision, made public on May 28, 2025, indicates a paradigm shift in the ministry's stance towards digital assets. Instead of issuing a skeptical warning, the department is now encouraging trustees to decide for themselves whether they want to include Bitcoin and other cryptocurrencies in their retirement plans. it-boltwise.de reports that Lori Chavez-DeRemer, the US Secretary of Labor, viewed the decision as a step toward restoring fiduciary control over investment decisions.

The original guidance warned fiduciaries to exercise “extreme caution” when offering crypto investments, particularly due to the high volatility and lack of regulatory clarity in the crypto space. In this context, the fiduciaries were required to ensure that they met the standards of professional care under the Employee Retirement Income Security Act (ERISA). These concerns have led many providers to be reluctant to include Bitcoin in their retirement portfolios. Now the withdrawal of the directive and the ministry's new, neutral stance signal an openness to digital assets. coinedition.com adds that the updated position also affects 401(k) plan sponsors and asset managers who were previously hesitant to offer cryptocurrencies.

Role of trustees and new opportunities

With the new policy, trustees are no longer forced to wait for guidelines from Washington that could potentially hinder the uptake of crypto investments. Rather, they must themselves evaluate the suitability of each crypto-related option and make decisions in the best interests of participants. Lori Chavez-DeRemer emphasized that the main thing is to strengthen the trustees' freedom of choice. The trustees now have responsibility for identifying suitable investment opportunities and appropriately managing associated risks.

This realignment also comes in line with similar developments at other federal agencies such as the Federal Deposit Insurance Corporation (FDIC), which in March 2023 allowed regulated institutions to engage in crypto-related activities without prior approval. This stance shows that the US government is gradually recognizing cryptocurrencies as legitimate investment options and is preparing to promote less restrictive regulation.

Politics and legal context

The withdrawal of the 2022 policy also represents an important step toward broader acceptance of cryptocurrencies in public pension funds. Some states, such as Texas and New Hampshire, have already passed laws allowing public pension funds to invest in Bitcoin. These developments are part of a growing trend in which government funds, such as those in Wisconsin and Michigan, have disclosed positions in Bitcoin spot ETFs.

Overall, the steps taken by the US Secretary of Labor and other regulators show a clear trend towards integrating digital assets into traditional forms of investment. The Ministry sees its new strategy as a way to promote fiduciary discretion while ensuring that the interests of investment participants are protected.