U.S. regulators moved a step closer to bringing crypto into mainstream retirement investing after the Department of Labor (DOL) published a draft rule that could allow cryptocurrencies and other alternative assets to be offered in 401(k) plans.
The proposal, titled “Fiduciary Duties In Selecting Designated Investment Alternatives,” appeared in the Federal Register and has opened a 60-day public comment period after clearing White House review in March. The effort follows an executive directive from President Donald Trump to expand investment choices in retirement plans.
What the draft does
- Formally recognizes digital assets as a distinct investment category.
- Sets out a structured, criteria-driven approach for plan fiduciaries to evaluate non-traditional assets — including performance, fees/costs, liquidity, valuation, benchmarking and overall complexity — with the aim of reducing liability risk under ERISA and related retirement laws.
Why it matters
Plan managers have historically steered clear of alternative assets because of unclear legal exposure when selecting investments for retirement accounts. By spelling out how fiduciaries should assess crypto and other alternatives, the DOL aims to give plan sponsors clearer legal footing and lower the perceived risk of lawsuits, potentially making it easier for retirement plans to include digital assets.
Market implications
Access to 401(k) capital could be a watershed for crypto markets. With trillions of dollars held in workplace retirement plans, even small, conservative allocations could translate into significant institutional flows. Large asset managers have already suggested modest exposure ranges for diversified portfolios — Morgan Stanley has indicated 2%–4%, while BlackRock has recommended roughly 1%–2%.
Product development
A finalized rule could accelerate the creation of retirement-tailored crypto products: managed funds, pooled strategies and exchange-traded structures designed to meet the liquidity, valuation and pricing requirements that fiduciaries need for long-term accounts.
Next steps
The proposal is still a draft and subject to change; stakeholders have 60 days to submit comments before the rule proceeds through the regulatory process. Observers will be watching both the comment period and any subsequent guidance that clarifies how retirement plans can safely integrate digital assets.
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