US Labor Department Proposes Rule That Could Allow Crypto in 401(k) Retirement Plans

The United States Department of Labor has proposed a new rule that could make it easier for retirement plans to include cryptocurrencies and other alternative investments in 401(k) plans. The proposal was released on March 30 and could impact more than 90 million Americans who currently hold 401(k) retirement accounts.

What the Proposed Rule Means

The proposed rule does not require retirement plans to invest in cryptocurrency. Instead, it creates a “safe harbor” for plan fiduciaries — the individuals responsible for selecting investment options in retirement plans.

Currently, fiduciaries are allowed to include crypto or alternative assets, but many avoid doing so because of legal risk. Under the Employee Retirement Income Security Act (ERISA), fiduciaries can be held personally responsible if an investment decision leads to losses. Because cryptocurrencies are considered volatile and unconventional, most plan sponsors have avoided offering them.

The new rule changes this situation by providing a six-factor review process. If fiduciaries carefully review and document their decision before adding alternative investments, they will receive legal protection from lawsuits. This shifts the focus from whether crypto should be included to whether the fiduciary followed a proper decision-making process.

Government Agencies Involved

The proposal is a joint effort involving multiple US government agencies, including the Department of Labor, the Treasury Department, and the Securities and Exchange Commission (SEC). The rule is part of a broader policy initiative following an executive order signed in August 2025 that aims to expand access to alternative investments in retirement accounts.

Labor Secretary Lori Chavez-DeRemer stated that the proposal is intended to modernize retirement investment options and allow Americans to invest in assets that reflect today’s financial markets.

Connection to Institutional Finance

The proposal also connects to broader changes in institutional investing. Large financial firms have increasingly argued that retirement accounts should provide access to a wider range of investments, including digital assets and tokenized assets.

If the rule is finalized, asset managers, fintech companies, and custodians may develop new retirement investment products that include cryptocurrencies and other alternative assets.

Important Note

The rule is still in the proposal stage and is open for public comment for 60 days. It is not yet final, and there is already political debate around it. Some lawmakers, including Senator Elizabeth Warren, have raised concerns about cryptocurrency volatility and high fees, warning that these risks could affect retirement savings.