US Labor Department proposes opening 401(k) plans to crypto to implement Trump order

The U.S. Department of Labor has released a proposed rule that would open up 401(k) retirement accounts to alternative assets, including cryptocurrencies, marking a step toward implementing President Donald Trump’s executive order.

The proposal outlines details on the steps 401(k) plan managers should take when they consider incorporating alternative assets into their investment portfolios. Such alternatives include digital assets, private equity, and real estate.

Specifically, the draft rule defines digital assets as “a new form of investing that includes a wide variety of assets that can be stored and transmitted digitally, including cryptocurrencies such as bitcoin and other tokens.”

The proposed regulation came in response to an executive order signed by Trump in August directing the Labor Department to pave the way for the inclusion of alternative assets in 401(k) retirement plans.

Trump’s order also requested the Securities and Exchange Commission to facilitate access to alternative assets for retirement savings plans by revising applicable regulations or guidance.

“This proposed rule is an initial step in implementing the President’s Executive Order in a safe and smart manner, broadening access to additional retirement plan options for millions of Americans while being mindful of the importance of protecting retirement assets,” Treasury ⁠Secretary Scott Bessent said in a statement. 

Opening access

The Labor Department noted in the statement that while retirement plan managers have always had the authority to consider alternative assets, “historically, almost none have done so.” 

If finalized, the rule change would offer a safe harbor for retirement plans governed by the Employee Retirement Income Security Act. Plan managers would be required to assess factors including performance, fees, liquidity, valuation, and complexity, per the statement. 

“The department’s days of picking winners and losers are over,” said Deputy Secretary of Labor Keith Sonderling. “Our rule clearly spells out that managers must evaluate any and all potential product offerings by following a prudent process.”

The proposal could open a substantial market to crypto. Americans held roughly $10.1 trillion in 401(k) plans at the end of 2025, up from $9 trillion a year earlier, according to data from trade association Investment Company Institute.

Senator Elizabeth Warren, however, criticized the proposed rule and said it could expose the plans to risky assets. “As cracks emerge in private credit, private equity returns fall to 16-year lows, and crypto keeps tumbling, Trump has decided now is the time to stick these risky assets into Americans’ 401(k)s,” said Warren.

The agency will open a comment period for 60 days after publishing the proposal on the federal register.

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