Labor Department Withdraws Guidance Limiting Digital Assets in Retirement Plans

Highlights:

• The Labor Department now allows fiduciaries to decide on including crypto in 401(k) retirement plans.
• Federal agencies continue to ease restrictions on digital assets in financial and retirement services.
• Crypto options remain rare in most plans despite the Labor Department withdrawing its 2022 guidance.

The United States Department of Labor has removed its 2022 guidance that warned against digital assets in retirement plans. This shift gives plan fiduciaries more freedom to decide whether to include cryptocurrencies in 401(k) offerings. The 2022 guidance advised fiduciaries to use extreme caution when offering crypto investments due to high risks. Although it did not ban digital assets, it discouraged their use and created barriers to adoption.

NEW: 🇺🇲 US Dept. Labor has rescinded anti-Bitcoin 401k guidance to exercise "extreme care" before adding Bitcoin and digital assets to 401k plans. pic.twitter.com/pnrUyfrMgB

— Fiat Archive (@fiatarchive) May 28, 2025

Secretary of Labor Lori Chavez-DeRemer indicated that federal officials should not be the ones making investment decisions. She stated that the department started to take sides when it released the 2022 guidance. Taking away that guidance brings back balanced rules and supports what fiduciaries are expected to do. They can now determine both risks and returns without influence from federal advisories.

The 2022 guidance raised concerns about price volatility, fraud, theft, and unclear asset values. These warnings pushed many retirement plan providers to exclude cryptocurrency options. The American Bankers Association criticized the guidance for being released without public input. The department’s new approach removes these warnings and encourages plan managers to make independent decisions.

Labor Department Withdraws Previous Crypto Guidance Amid Federal Policy Shift

This change follows a growing trend among U.S. agencies to support digital asset use in finance. Many federal departments have started to take a friendlier approach to digital asset services and investments. Under new leadership, the Securities and Exchange Commission has dropped several lawsuits against major crypto companies, including Coinbase and Kraken. The SEC is now holding roundtable meetings with industry leaders to discuss asset classifications and digital investment structures.

At the same time, the Office of the Comptroller of the Currency has also changed its direction. It now allows national banks to handle digital asset transactions under clear conditions. These steps show a broader change in the government’s position on digital finance. They also reflect efforts to honor campaign promises supporting digital asset growth.

Several states have moved forward with digital asset investments in public pension funds. For example, pension funds in Michigan and Wisconsin have invested in Bitcoin exchange-traded funds. In addition, Texas and New Hampshire passed Strategic Bitcoin Reserve bills. These laws direct a portion of pension fund money into Bitcoin holdings.

Changes in federal and state policies may also affect Bitcoin’s market response. In the past, statements from the Labor Department and other agencies have influenced its price. As a result, more retirement fund managers may start to include digital assets in what they invest in.

Crypto Inclusion Still Limited Despite Policy Reversal

Despite the fact that guidance is now withdrawn, few retirement plans offer crypto. Many providers have not introduced digital assets as an option to their investors. Fidelity introduced the ability to use Bitcoin in retirement plans in 2022.

The new guidance from the Labor Department could attract more interest from those responsible for running retirement plans and insurance firms. The use of digital assets in pension planning will take some years before they become mainstream. At this point, the decision offers flexibility without formally giving approval or disapproval.