The Department of Labor just ditched its 2022 crypto warnings and went neutral on cryptocurrency in 401(k) plans. Plan sponsors can now offer bitcoin and other digital assets without getting the regulatory stink eye. ERISA standards still apply, so fiduciaries better do their homework. The FDIC and Federal Reserve are also softening their stance. Bitcoin hit record highs in late 2024, fueling investor appetite. This regulatory flip could reshape retirement investing entirely.
After three years of telling 401(k) plan sponsors to exercise “extreme care” with cryptocurrency investments, the Department of Labor has done an about-face.
On May 28, 2025, the agency rescinded its 2022 guidance that basically treated crypto like financial kryptonite. Gone are the stern warnings. Gone is the hand-wringing about extreme caution. Instead, the DOL now takes what it calls a “neutral stance” on cryptocurrency options in retirement plans.
This isn’t happening in a vacuum. The regulatory winds have shifted dramatically across multiple agencies. The FDIC now says banks can engage in crypto activities as long as they manage risks properly. The Federal Reserve has also backed away from earlier warnings about bank involvement with digital currencies.
For 401(k) plan sponsors, this means considerably more flexibility. They can now consider cryptocurrency as a viable investment option without feeling like regulatory watchdogs are breathing down their necks. This could lead to much greater diversity in investment portfolios offered by retirement plans. With Bitcoin reaching record high prices in late 2024, many investors are eager to participate in the crypto market.
But let’s be clear about something. Crypto markets are still wildly volatile. That hasn’t changed. What has changed is the government’s willingness to let adults make their own investment decisions, even risky ones.
Plan fiduciaries still need to do their homework. ERISA standards haven’t disappeared into thin air. Fiduciaries must guarantee investments align with participants’ best interests and exercise professional care when selecting options. They also need to educate participants about both risks and potential benefits of crypto investments.
The broader implications are notable. Financial institutions and plan sponsors are likely to adjust their strategies in response to these regulatory changes. Consumer access to crypto investment options could expand greatly. Fidelity Investments previously faced significant political backlash when it announced plans to include bitcoin in their 401(k) offerings. The American Bankers Association had criticized the original guidance for lacking proper public comment procedures before adoption.
This regulatory evolution reflects changing attitudes toward cryptocurrencies across the federal government. It’s part of a broader shift toward more permissive policies that could influence market trends and investment behaviors.
The market impact remains to be seen. Cryptocurrency can offer portfolio diversification benefits, but robust risk management strategies are still crucial to mitigate potential losses. Economic factors like inflation may also influence how quickly crypto adoption spreads through 401(k) plans.
The message is clear: crypto in retirement plans just got the green light.
