The US Department of Labor has put forward a proposed rule change that would broaden the range of investment options available within 401(k) retirement plans, including the addition of digital assets such as cryptocurrencies. A notice for the proposal, titled Fiduciary Duties In Selecting Designated Investment Alternatives, appeared in the Federal Register on Monday. A pre-published version of the document outlines the factors retirement plan managers should weigh when incorporating crypto and other alternative investments into client portfolios. The move brings the country closer to fulfilling a directive issued by President Donald Trump.
The draft rule defines digital assets as a new form of investing encompassing a wide variety of assets that can be stored and transmitted digitally, including cryptocurrencies such as Bitcoin and other tokens. The proposal represents a significant shift in how retirement savings vehicles could be structured going forward. If adopted, it would open the door for retirement capital — potentially worth trillions of dollars — to flow into the digital asset sector. Supporters argue this would further legitimize crypto as a mainstream investment vehicle and expand institutional participation.
The proposal advances an executive order Trump signed in August, which directed the Labor Department, the Securities and Exchange Commission, and the Treasury Department to expand investment options within 401(k) plans and revise related regulations. Labor Secretary Lori Chavez-DeRemer stated that the proposed rule would demonstrate how plans can consider products that better reflect the investment landscape as it exists today. Her remarks signal the administration’s intent to modernize retirement planning frameworks to account for emerging asset classes.
SEC Chair Paul Atkins also weighed in on Monday, describing the broadening of American investors’ access to well-diversified, long-term investments that harness innovation and economic growth as a critical priority for effective retirement planning. His comments align with the broader regulatory push to integrate alternative assets into traditional savings structures. The coordinated messaging from multiple agencies suggests a unified approach to implementing the executive order’s directives.
Morgan Stanley, an investment bank that has made a significant push into the crypto space this year, informed its 16,000 financial advisers in October that they are permitted to recommend cryptocurrency investments to clients. Those advisers collectively manage approximately $6.2 trillion in client assets. In the same month, the firm recommended allocating between 2% and 4% of investor portfolios to crypto. Meanwhile, BlackRock, the world’s largest asset manager, takes a more conservative stance, recommending a 1% to 2% crypto allocation for more diversified portfolios.
The varying allocation recommendations from major financial institutions reflect ongoing debate about the appropriate role of digital assets in long-term retirement strategies. Proponents contend that even modest exposure to crypto can enhance portfolio diversification and capture growth in an evolving asset class. Critics, however, have previously noted that cryptocurrencies carry substantial volatility and risk, particularly within the context of retirement savings where capital preservation is a key concern. The Labor Department’s proposal is expected to undergo a public comment period before any final rule is adopted.
Originally reported by CoinTelegraph.
