US Secretary Janet Yellen wouldn’t recommend crypto as a viable option for retirement savers. She stated that including cryptocurrencies in retirement plans is a very risky move that Congress should address.
On June 9, at a New York Times event in Washington, Yellen expressed her thoughts on Fidelity Investments’ pioneering attempt to embrace cryptocurrency in retirement plans. She said that it is not something she would recommend to most people who are saving for retirement. “To me, it’s a very risky investment.”
The Department of Labor, as well as Senators Elizabeth Warren, Tommy Tuberville, and Cynthia Lummis, took part in a discussion about digital currencies in 401(k) plans. She also added that Congress should regulate the assets that should be included in retirement plans.
I’m not saying I recommend it, but that to my mind would be a reasonable thing,” she said of congressional action.
The discussion was much more critical as there has been uncertainty in the legislative context regarding the usage of cryptocurrency options for retirement since the beginning. The Employee Retirement Income Security Act of 1974 governs 401(k) investments.
Fidelity made an announcement in April that it would provide an option for account holders to invest in bitcoin for their retirement savings directly. But the announcement was threatened with legal action by the United States Department of Labor as the firm was questioned about the plan to address the risks involved with it.
Senator Tommy Tuberville of Alabama, however, has introduced the “Financial Freedom Act,” which would allow investors to include cryptocurrency in their 401(k) retirement savings plan. But as Yellen said, the necessity to address the danger should be in place.
