The U.S. Department of Labor has put forward a proposed rule that would establish a safe harbor for 401(k) fiduciaries who follow a defined review process when considering alternative investments, including funds with exposure to cryptocurrencies and other digital assets. The proposal was made available through the Federal Register on Monday ahead of formal publication on Tuesday. It fulfills a directive issued by President Donald Trump in August of last year to broaden access to alternative assets within 401(k) plans.
Under the proposed framework, fiduciaries that conduct thorough evaluations covering performance, fees, liquidity, valuation, benchmarking, and complexity would qualify for the safe harbor protection. Currently, only 4% of defined contribution plans offered alternative investments last year, with just 0.1% of assets allocated to such options, according to figures cited in the proposal. Americans held approximately $10.1 trillion in 401(k) plans at the close of 2025, part of a broader $14.2 trillion defined contribution market, per data from the Investment Company Institute.
The move follows the Labor Department’s decision last May to withdraw Biden-era guidance that had called on fiduciaries to exercise extreme care before adding crypto to retirement plan menus. The agency said that standard exceeded what federal retirement law actually requires. The rescission cleared the way for the current proposal, which places digital assets on equal footing with other alternative investment categories.
Andrew M. Bailey, Senior Fellow at the Bitcoin Policy Institute, described retirement funds as highly attractive to bitcoin advocates given their scale and tax-advantaged structure. He noted, however, that retirement plans carry an inherent tension: their long time horizons make them suitable for investments in emerging technologies, while their risk-averse nature and strict regulations pull in the opposite direction. Rule changes that give savers more autonomy over their own choices would be a positive development, he said.
Bailey also raised a secondary question about market dynamics, pointing to equity-based vehicles such as Strategy‘s preferred stock offerings as products that could either be displaced or complemented by direct 401(k) crypto exposure. Whether savers will ultimately choose to allocate retirement funds to digital assets once the rules are finalized remains uncertain, he added. The practical uptake among ordinary retirement savers is, in his view, the harder question to answer.
Joshua Chu, a lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, said the proposal gives fiduciaries a clear roadmap rather than a regulatory minefield, provided they can document a rigorous process covering fees, liquidity, valuation, and complexity. He noted that retirement savers could gain access to alternative-asset returns without plan sponsors facing undue regulatory uncertainty. Before any crypto exposure reaches a retiree’s account, however, fiduciaries would still need to establish daily pricing, liquidity management, and risk controls within 401(k) structures.
Chu also observed that the proposal could position U.S. retirees ahead of their counterparts in much of Asia when it comes to regulated crypto access in retirement accounts. Hong Kong‘s pension system and China‘s trading ban continue to exclude digital assets from retirement savings vehicles in those markets. If finalized, the U.S. rule would represent a meaningful shift in how retirement savers can engage with the digital asset class.
Originally reported by Decrypt.
