The U.S. Department of Labor has proposed a rule that would make it easier for 401(k) plans to include alternative assets such as cryptocurrencies, private equity and real estate.
The proposal comes in response to an executive order issued by President Donald Trump in August directing the Labor Department and the Securities and Exchange Commission to promote expanded access to alternative assets in 401(k)s.
“This proposed rule will demonstrate how programs consider products that better reflect today’s investment landscape,” Labor Secretary Lori Chavez-DeRemer said in a statement.
If passed, the rule would mark a shift in how retirement plans are created. For years, most 401(k) plans have focused on stocks and bonds. The new approach will allow plan providers to add a wider portfolio of assets, including digital tokens and private market funds that do not trade on public exchanges.
The move builds on previous changes. Last May, the Labor Department rescinded previous guidance urging fiduciaries to take “extreme caution” before adding cryptocurrencies to retirement plans. Trump’s executive order goes a step further, calling for digital assets to be treated the same as other investment options.
Still, the proposal drew criticism from some lawmakers and financial advisers.
“With cracks appearing in private credit markets, private equity returns falling to 16-year lows, and cryptocurrencies continuing to plummet, President Trump has decided now is the time to bring all these risky assets into U.S. 401(k) plans,” Senator Elizabeth Warren said in a statement. She warned that the rule could cost workers while benefiting large financial companies.
Cryptocurrency risks can be significant. U.S. 401(k) plans hold trillions of dollars in retirement savings, and even a small shift toward digital assets could bring new capital to the market. If a large scheme with tens of thousands of employees allocates just 1% of its portfolio to Bitcoin, that would mean millions of dollars flowing into crypto funds or tokens.