Rule allowing crypto in 401(k)s reaches White House for final review

The Department of Labor's involvement with crypto in retirement plans dates to 2022, when guidance under the Biden administration told fiduciaries to exercise 'extreme care' before adding bitcoin to 401(k) menus, a standard many employers treated as a de facto bar. Fidelity broke ranks that year, offering a bitcoin sleeve to plan sponsors anyway. The rule now at the White House rewrites that posture: instead of discouraging crypto, it builds a six-factor test and a process-based safe harbor fiduciaries can follow under ERISA's prudent-investor duties.

Once finalized, employers and plan administrators such as Fidelity, Vanguard and Charles Schwab gain a documented path to add crypto funds to 401(k) lineups without inviting breach-of-duty lawsuits, provided they document review of fees, liquidity, valuation and complexity. Plan participants get access to crypto exposure inside tax-advantaged retirement accounts for the first time at scale, but also inherit volatility and custody risk the six criteria are meant to screen, not eliminate. Recordkeepers must rebuild due-diligence files to match the new checklist.

Retirement law was built on a single idea: a prudent person protects savings they cannot easily grow, which is the logic behind decades of limiting 401(k)s to diversified, liquid, low-cost funds. Opening that structure to an asset class defined by its volatility tests that logic directly, and the Labor Department is betting that a documented process substitutes for the prudence itself. Whether a six-point checklist satisfies ERISA's fiduciary standard in court, rather than just on paper, is the real question regulators have left unanswered.

The next formal step is completion of White House Office of Information and Regulatory Affairs review, after which the rule can be published in the Federal Register with an effective date and any transition period for plan sponsors. Watch whether OIRA sends it back with changes to the six criteria or the safe-harbor language, and whether major recordkeepers announce crypto options on the day it clears, a signal of how quickly adoption follows the paperwork.

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