U.S. Labor Department Moves to Ease 401(k) Access to Crypto and Other Alternative Assets
The U.S. Department of Labor has unveiled a proposed rule designed to make it easier for 401(k) retirement plans to add alternative investments, including cryptocurrencies, private equity and real estate.
The proposal follows an executive order issued by President Donald Trump in August directing the Labor Department and the Securities and Exchange Commission to expand access to alternative assets in 401(k)s. Labor Secretary Lori ChavezDeRemer said the rule would provide a framework for how retirement plans can evaluate products that better match today's investment landscape.
If finalized, the change would signal a break from the long-standing 401(k) model that largely centers on publicly traded stocks and bonds. Under the new approach, plan providers could offer a wider set of holdings, including digital tokens and private-market funds that do not trade on public exchanges.
The proposal also builds on earlier moves by the department. In May, the Labor Department withdrew prior guidance that urged fiduciaries to use "extreme care" before adding crypto to retirement plans. Trump's executive order went further, calling for digital assets to be considered alongside other investment options.
Criticism has emerged from some lawmakers and financial advisors. Senator Elizabeth Warren said in a statement that, as stresses appear in private credit, private equity returns hit 16-year lows and crypto continues to slide, the administration is pushing to place risky assets into Americans' 401(k)s. She argued the rule could increase the risk of losses for workers while benefiting large financial firms.
The potential implications for crypto markets could be significant. U.S. 401(k) plans hold trillions of dollars in retirement savings, and even a modest reallocation to digital assets could channel substantial new capital into the sector. A large plan with tens of thousands of participants shifting just 1% of its portfolio into bitcoin could translate into millions of dollars flowing into crypto funds or tokens.
