Fidelity Investments has become the first retirement-plan provider to offer clients the option to put bitcoin into their 401(k)s retirement savings, in an effort to further embrace cryptocurrencies and initiate broader acceptance among employers.
The feature will become available later this year, and will allow Fidelity’s 23,000-some clients that use the financial company’s retirement plans to let their employees invest in bitcoin through the newly-created Digital Assets Account (DAA). The plan will allow savers to earmark up to 20% of their nest eggs into bitcoin, with plans to eventually allow other cryptocurrency options later in the future. “We have seen growing and organic interest from clients,” said Fidelity’s head of workplace retirement offerings and platforms Dave Gray.
Employers will have the option to decide the size of their employees’ contribution to the DAA, as well as set limits on altering their bitcoin contributions. Fidelity revealed that bitcoin corporate sponsor MicroStrategy (NASDAQ: MSTR) will become the first company to offer the new 401(k) services to its employees.
Fidelity’s latest offering comes after the US Labour Department last month raised worries about the potential implications of including cryptocurrencies in retirement plans. A guidance published on March 10 warned employers to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu,” and should be prepared to answer regulators’ questions “about how they can square their actions with their duties of prudence and loyalty” as per US pension law.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
