In the United States, cryptocurrency has become the latest political flashpoint. Last month, Fidelity Investments’ announcement to offer bitcoin as an investment option in its 401(k) plans by mid-year ruffled some feathers.
One of them is longtime crypto critic Senator Elizabeth Warren, who expressed concern that the investment firm could expose its clients to a “risky and speculative bet.”
Republicans defended Fidelity by accusing Democrats of “excessive government power and violation of Americans’ free-market rights.”
On May 20, Republicans introduced a new bill dubbed “The Financial Freedom Act” that sought to prevent the Labor Department from restricting the investment options available to employees in self-directed retirement accounts.
Proposed bill, if passed, could allow Americans to add cryptocurrency to their 401(k)[k] plans if they decide to do so.
Interestingly, Fidelity’s decision followed after the Department of Labor warned that companies investing their employee contribution plans in digital assets, including Bitcoin, would invite legal action.
In a notice dated March 10, the DOL Employee Benefits Security Administration said trustees “should exercise extreme caution” before including direct crypto investment options.
Fidelity objected to this advice and pulled a letter claiming that the DOL has not provided information on how fiduciaries can “discharge their fiduciary duties in evaluating cryptocurrencies”.
American DOL vs. Fidelity
Always provocative, the investment company announced that it would allow customers to place 20% of their savings in bitcoin; other cryptocurrencies will likely be added later.
Sen. Tommy Tuberville, R-Ala, who also oversaw similar crypto legislation, said:
“The government has nothing to do to prevent retirement savers who want to make their own investment choices,” Tuberville said. “When you’ve earned your paycheck, how you invest your money should be your decision. Our legislation ensures that this is the case.
While Republicans and Democrats might exploit crypto for political gain, one thing is certain, crypto has expanded the reach of investments among individuals of all ages.
Not only giants, but even lesser-known companies have been instrumental in making virtual currencies popular.
A Nebraska-based crypto wallet company Exodus pays its staff in bitcoin. One of his employees, Denver native Alyssa Howell, managed to finance a home and save for retirement using her cryptocurrency earnings.