On Thursday, Janet Yellen, the Secretary of the United States Treasury shared her opinion on crypto in 401(k) plans, at an event organized by the New York Times in Washington. She says that it is not recommended to include crypto in a 401(k) retirement plan. She thinks that it is a risky investment.
“It’s not something that I would recommend to most people who are saving for their retirement. To me, it’s a very risky investment.”
The Department of Labor and senators Cynthia Lummis, Tommy Tuberville, and Elizabeth Warren also took part in the discussion around digital currencies in 401(k) plans. Yellen also said that Congress should regulate the type of assets included in retirement programs.
“I’m not saying I recommend it, but that to my mind would be a reasonable thing.”
A legislative uncertainty has been spiralling around crypto as a retirement investment. The Employee Retirement Income Security Act of 1974 is a law responsible for regulating 401(k) investments. The law does not specify the types of assets that can be included in 401(k) plans. The law only states to “show the care, skill, prudence and diligence that a prudent person would exercise.”
In March, the Labor Department had urged investors to take ‘extreme care’ before adding crypto to their 401k retirement plans. Back then, the Employee Benefits Security Administration said that it planned to take suitable actions to protect the interests of 401k plan participants and beneficiaries concerning these investments.
A bill to allow investors to add cryptocurrency to their 401(k) retirement savings plans has been unveiled by Senator Tommy Tuberville. As a part of her long-anticipated crypto bill, Wyoming Senator Cynthia Lummis subtly spoke about the bill on a live-stream hosted by Axios.