Key Takeaways:
The Trump administration has eliminated regulatory barriers that previously discouraged employers from offering cryptocurrency options in workplace retirement plans.
The prior guidance warned employers to use “extreme care” and launched investigations into plan sponsors offering crypto options.
Despite the change, crypto remains rare in 401(k) plans; fewer than 1% include digital assets, according to a 2024 GAO report.
The U.S. Department of Labor has rescinded a 2022 policy that discouraged the inclusion of cryptocurrency in workplace 401(k) plans, as stated in a news release on May 28.
The reversal marks a major policy shift, indicating a return to a neutral regulatory stance and potentially reigniting interest in crypto investment options for retirement accounts.
Labor Dept. Ends ‘Extreme Caution’ Guidance on Crypto in 401(k) Plans
The earlier guidance, issued under the Biden administration, warned employers to exercise “extreme care” before offering digital assets like Bitcoin in employee retirement plans.
It also introduced an “investigative program” directed at sponsors who offered crypto through direct menus or self-directed brokerage windows. That approach had a chilling effect on adoption, causing some firms to rethink plans to add crypto options.
The reversal announced on May 28 by the Department of Labor’s Employee Benefits Security Administration said the 2022 guidance had overstepped its bounds.
According to the agency, the guidance conflicted with the department’s legal obligation to remain neutral on investment choices offered in retirement plans.
“The Biden administration’s Department of Labor made a choice to put their thumb on the scale,” said Secretary of Labor Lori Chavez-DeRemer. “We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats.”
The change may reopen the door for firms like Fidelity, which had begun exploring crypto offerings for 401(k)s before the previous policy took effect.
However, the broader financial industry has shown limited enthusiasm for alternative assets in retirement accounts. Crypto remains rare in 401(k) plans.
A 2024 report from the Government Accountability Office found that fewer than 1% of defined-contribution plans included digital assets, with only 69 crypto-based investment options available nationwide.
Critics argue that retirement accounts should focus on stable, long-term investments, not volatile assets like Bitcoin. The crypto industry, meanwhile, maintains that digital assets democratize access and offer new opportunities for everyday investors.
ForUsAll Inc., the first U.S. crypto 401(k) recordkeeper, had tried and failed to overturn the Biden-era guidance in court last year.
A federal judge ruled that reversing the policy would not revive the company’s business.
The Labor Department says it will neither endorse nor disapprove specific assets. Fiduciaries remain responsible for assessing whether crypto, or any other investment, is appropriate for their plans.
U.S. Regulators Loosen Crypto Restrictions, Paving Way for Broader Institutional Adoption
The Department of Labor’s reversal on crypto restrictions is the latest in a wave of federal rollbacks reshaping how digital assets are treated across the U.S. financial system.
Since President Donald Trump returned to office in January, his administration has taken a markedly pro-crypto stance.
Trump himself has openly embraced the industry, launching a meme coin, $TRUMP, and announcing plans to build a Bitcoin treasury through his media company.
Federal agencies have followed suit. For example, in March, the FDIC rescinded its 2022 policy requiring banks to seek prior approval before engaging in crypto-related activities.
The updated guidance, FIL-7-2025, permits FDIC-supervised banks to offer crypto services, provided they manage associated risks and adhere to safety and soundness standards.
While banks must notify the agency, prior approval is no longer required.
The Office of the Comptroller of the Currency (OCC) also relaxed restrictions in March, allowing national banks and federal savings associations to engage in crypto custody, stablecoin activities, and distributed ledger participation without needing supervisory nonobjection.
Acting Comptroller Rodney E. Hood said the shift reflects the agency’s improved understanding of crypto and its plan to foster responsible innovation.
In April, the Federal Reserve joined the pivot, withdrawing 2022 and 2023 guidance that discouraged state banks from engaging in crypto and stablecoin operations, indicating a coordinated regulatory shift favoring digital assets in 2025.
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