The US Labor Department published a proposed regulation on Monday intended to give 401(k) participants access to alternative investments, including crypto assets such as Bitcoin (BTC).
The Employee Benefits Security Administration (EBSA) framed the rule as “historic,” saying it lays out a clear, process-driven framework that plan fiduciaries can follow when evaluating non-traditional assets for defined contribution plans.
Safe‑Harbor Rules For 401(k) Considering Crypto
At the heart of the proposal are safe-harbor procedures designed to guide plan managers through the selection of designated investment alternatives.
Under the rule, fiduciaries would be required to evaluate potential alternatives, addressing factors such as expected performance, fees, liquidity, valuation methods, appropriate performance benchmarks, and the complexity of the crypto assets.
The department emphasized that the rule is intentionally neutral with respect to asset classes: it does not endorse any particular type of investment but instead sets out a prudent process for review and selection.
The move follows President Trump’s executive order, “Democratizing Access to Alternative Assets for 401(k) Investors,” and represents an attempt to translate that directive into practical regulatory guidance, according to the statement on the matter.
Labor Department officials say the proposed rule returns the agency to a long-standing approach that focuses on fiduciary process rather than picking winners and losers among asset types.
“The department’s days of picking winners and losers are over. Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process,” said Deputy Secretary of Labor Keith Sonderling.
Treasury And SEC Back Labor Proposal
The EBSA noted that the Biden administration’s 2022 compliance guidance — which effectively discouraged fiduciaries from offering crypto options — diverged from the Employee Retirement Income Security Act’s (ERISA) requirements, contributing to the limited uptake of alternatives in retirement plans.
The new proposal aims to remove that regulatory uncertainty by providing concrete, process-based protections for fiduciaries who choose to consider crypto investments. Officials from other agencies welcomed the initiative as part of a broader push to expand retirement investment options.
Treasury Secretary Scott Bessent praised the Labor Department’s rulemaking as “another step in ushering in President Trump’s Golden Age,” saying the proposal seeks to broaden access to additional retirement options for “millions of Americans” while protecting retirement assets.
Securities and Exchange Commission (SEC) Chairman Paul Atkins also expressed support, noting that enabling Americans to participate in innovation and economic growth through diversified, long-term investments is important for retirement planning and that the SEC helped formulate the proposal.
If finalized, the rule would provide plan fiduciaries with a structured path to consider crypto and other alternative assets without immediately exposing them to the compliance risks that had discouraged inclusion in recent years.
At the time of writing, Bitcoin was trading at $66,580, having failed to capitalize on moves slightly above $68,000 earlier on Monday.
Featured image from OpenArt, chart from TradingView.com
