The US Department of Labor has advanced a proposal that could allow cryptocurrencies and other alternative assets to be included in 401(k) retirement plans, bringing digital assets closer to mainstream retirement investing.
Summary
- The US Labor Department has proposed a rule to allow crypto and alternative assets in 401k retirement plans.
- The framework has set out six key criteria to guide fiduciaries when selecting such investments.
- The change could open access to retirement capital and increase institutional participation in crypto markets.
The proposal, published in the Federal Register under the title “Fiduciary Duties In Selecting Designated Investment Alternatives,” has entered a 60-day public comment period after clearing White House review earlier in March. The move follows an executive directive by U.S. President Donald Trump to expand investment choices within retirement plans.
As part of the framework, regulators have outlined how fiduciaries should evaluate non-traditional assets, including crypto, using criteria such as performance, costs, liquidity, valuation, benchmarking, and overall complexity. The draft also formally recognizes digital assets as a distinct category of investment.
Officials have framed the rule as an effort to provide a clearer legal footing for plan managers, who have historically avoided alternative assets due to liability concerns under existing retirement laws. By defining a structured evaluation process, the proposal seeks to reduce the risk of legal challenges when such assets are included.
What does this mean?
Access to retirement capital could mark a turning point for the digital asset market. With trillions held in 401(k) plans, even limited allocations could introduce meaningful institutional flows into crypto.
Large asset managers have already begun shaping allocation strategies. Morgan Stanley has suggested exposure in the 2% to 4% range, while BlackRock has recommended a more conservative 1% to 2% allocation within diversified portfolios.
A finalized rule may also encourage the rollout of products tailored for retirement accounts, including managed crypto funds and exchange-traded structures designed to meet liquidity and pricing requirements for long term investors.
