- Rep. Byron Donalds has introduced a bill aimed at ensuring that Americans can include Bitcoin in their 401(k) plans.
- The bill is the House companion to the Financial Freedom Act, a bill the Senate introduced earlier this month.
- The success or failure of the bill may affect Fidelity, which allows users to include Bitcoin in their 401(k)s.
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A member of the US House of Representatives has introduced a bill to ensure that bitcoin is allowed in 401(k) retirement plans.
A bill supporting the Financial Freedom Act
On Friday, May 20, Representative Byron Donalds (R-Fla) introduced a bill that would allow Americans to include bitcoin and most other financial assets in 401(k) retirement plans.
The bill is the House companion to the Senate Financial Freedom Act of 2022. The original bill contains the same language and was introduced by Senator Tommy Tuberville (R-A) on May 5.
Both projects were submitted in response to regulatory guidance issued by the US Department of Labor in March. This directive advises investment firms not to allow encryption in 401(k) seconds.
In a statement, Donalds said the Labor Department’s comments were “a far-reaching and comprehensive effort to centralize power in Washington” and said the directives “violate the founding principles of economic freedom and free markets.”
Donalds says his bill has received support from several members of the House of Representatives, including Representatives Warren Davidson (R-Ohio), Young Kim (R-C), David Schweckert (AZ) and Tom Emer (R-) MN).
The crypto industry has also expressed support for the Financial Freedom Act. The Blockchain Association and the Chamber of Digital Commerce were both quoted in Donalds’ announcement.
Fidelity retirement plan can be affected
The success or failure of the Financial Freedom Act has implications for Fidelity Investments, a company that announced plans to introduce Bitcoin into its 401(k) retirement plans earlier this year despite the challenges.
On April 15, Fidelity announced his opposition to the Labor Department. In its letter, Fidelity expressed concerns about the division’s rule-making, writing that the rule “effectively considers the choice of cryptocurrencies … unwise” in 401(k) plans.
Regardless of these issues, Fidelity has moved ahead with the plans and announced a workplace digital asset account on April 26.
Democratic members of the government responded to the announcement. Senators Elizabeth Warren (D-MA) and Tina Smith (D-Mn) wrote a letter to Fidelity May 4 warning of the “risks of fraud, theft, and significant loss” that can come from the option.
It is unclear how many other major investment management firms are actively trying to offer Bitcoin retirement options. However, bills introduced this month aim to prevent the Department of Labor from dictating broadly permitted assets in 401(k) plans, meaning they will remain relevant beyond encryption.
Disclosure: At the time of writing, the author of this article owns BTC, ETH, and other cryptocurrencies.