Key points to remember
- Representative Byron Donalds introduced a bill to ensure Americans can include Bitcoin in their 401(k) plan.
- The bill is the House companion to the Financial Freedom Act, a bill introduced by the Senate earlier this month.
- Whether the bill succeeds or fails could affect Fidelity, which allows users to include Bitcoin in their 401(k)s.
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A member of the United States House of Representatives has introduced a bill to ensure Bitcoin is allowed in 401(k) retirement plans.
Bill supports Financial Freedom Act
On Friday, May 20, Rep. Byron Donalds (R-FL) introduced a bill that would allow Americans to include Bitcoin and most other financial assets in their 401(k) retirement plans.
The bill is the House companion to the Senate Financial Freedom Act of 2022. The original bill featured identical language and was introduced by Sen. Tommy Tuberville (R-AL) on May 5.
Both bills were introduced in response to regulatory guidance issued by the US Department of Labor in March. These guidelines advise investment firms against allowing crypto in 401(k)s.
In a statement, Donalds said he called the Labor Department’s comments “a far-reaching and far-reaching attempt to centralize power in Washington” and said the guidelines “violate the founding principles of economic freedom and free markets.” free”.
Donalds says his bill has received support from several members of the House of Representatives, including Representatives Warren Davidson (R-OH), Young Kim (R-CA), David Schweikert (R-AZ) and Tom Emmer ( R-MN).
The crypto industry has also expressed support for the Financial Freedom Act. Both the Blockchain Association and the Chamber of Digital Commerce are named in Donalds’ announcement.
Fidelity’s pension plan could be affected
The success or failure of the Financial Freedom Act has implications for Fidelity Investments, a company that announced plans to offer Bitcoin in its 401(k) retirement plans earlier this year despite challenges.
On April 15, Fidelity voiced its opposition to the Department of Labor. In its letter, Fidelity expressed concerns about the department’s rulemaking, writing that the rule “effectively deems the selection of cryptocurrencies…to be imprudent” in 401(k) plans.
Regardless of these issues, Fidelity went ahead with its plans and announced its Workplace Digital Assets account on April 26.
The Democratic members of the government responded to this announcement. The senses. Elizabeth Warren (D-MA) and Tina Smith (D-MN) wrote a letter to Fidelity on May 4 warning of “significant risks of fraud, theft and loss” that could arise from the option.
It’s unclear how many other major investment management firms are actively trying to offer Bitcoin retirement options. However, the bills introduced this month aim to prevent the Department of Labor from broadly dictating the assets allowed in 401(k) plans, meaning they will remain relevant beyond crypto.
Disclosure: At the time of writing this article, the author of this article owned BTC, ETH, and other cryptocurrencies.
