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Yellen Weighs in on Crypto and 401(k)s

DC Plan Design

U.S. Treasury Secretary Janet Yellen has weighed in on the notion of including cryptocurrency in retirement plans.

Bloomberg Law reports that, in response to a question about Fidelity’s April 26 announcement that it would provide a crypto option on its retirement plan platform, Yellen responded: “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.”

Yellen also opined at the DealBook policy forum in Washington that it would be reasonable for Congress to regulate what assets could be included in tax-favored retirement vehicles. “I’m not saying I recommend it, but that to my mind would be a reasonable thing,” she said of congressional action, according to the report.

The controversy kicked in to high gear when in March the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) published Compliance Assistance Release No. 2022-01 cautioning plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.