US Treasury Secretary Janet Yellen spoke out about including cryptocurrencies in retirement plans, calling them very risky investments that should be regulated by Congress.
During an event hosted by the New York Times in Washington on June 9, Yellen general her opinion on Fidelity Investments’ first attempt to include cryptocurrencies in retirement plans:
“This is not what I would recommend to most people who are saving for retirement. It’s a very risky investment for me.”
The Department of Labor and Senators Elizabeth Warren, Tommy Tuberville, and Cynthia Lummis took part in discussions about digital currencies in the 401(k) plans.
Yellen went so far as to say that Congress can regulate the type of assets that can be included in retirement plans:
“I’m not saying I recommend it, but I think it would make sense.”
The last statement is important in the context of the legislative uncertainty that has accompanied the theme of cryptocurrency as a retirement investment from the very beginning. 401(k) investments are governed by the Employee Retirement Income Security Act of 1974. It does not specify which asset classes may or may not be included in 401(k), but obliges confidants to “exhibit the care, skill, prudence, and diligence that a prudent person would exercise.”
Crypto 401(k): Smart Financial Planning or Gambling for the Future?
In April, Fidelity announced that it would allow 401(k) retirement savings account holders to directly invest in bitcoin (BTC). The US Department of Labor (DOL) responded with a compliance report threatening legal action, and Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota have asked the firm for answers on how they plan to address the risks outlined by DOL.
Meanwhile, Senator Tommy Tuberville of Alabama unveiled a “Financial Freedom Act” allowing investors to add cryptocurrencies to their 401(k) retirement savings plan, and Wyoming Senator Cynthia Lummis teased the legalization of cryptocurrencies in a 401(k) as part of her long-awaited bill for cryptocurrency.
Credit : cointelegraph.com