Crypto Gains Ground as Long-Term Allocation in U.S. 401(k) Retirement Plans

U.S. 401(k)s are employer-sponsored retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). On March 10, 2022, the Labor Department urged fiduciaries to exercise “extreme care” with cryptocurrencies. It withdrew that guidance on May 28, 2025, returning decisions to fiduciaries under their duty of prudence and paving the way for regulatory easing.

The Labor Department’s Employee Benefits Security Administration proposed a rule on March 30, 2026, that would give fiduciaries access to a procedural safe harbor if they objectively assess performance, fees, liquidity, valuation and complexity. The proposal could affect $14.2 trillion in retirement savings. On June 2, Democratic lawmakers Scott, Sanders and Warren jointly called for its withdrawal. On June 26, Maxine Waters, the top Democrat on the House Financial Services Committee, sent another letter opposing it.

US 401(k) plans are employer-sponsored defined-contribution accounts governed by ERISA, which requires fiduciaries to act prudently and in participants’ interests. Investment menus have largely centered on public stocks and bonds, while private equity, private credit and crypto have remained limited by litigation, valuation, fee and liquidity concerns. The policy shift matters because the affected market spans roughly 721,000 retirement plans, 118 million workers and $8.8 trillion in assets.

The Labor Department’s Employee Benefits Security Administration unveiled the proposed rule on March 30, 2026, implementing President Donald Trump’s August 7, 2025 executive order. Published in the Federal Register on March 31, the measure creates a process-based safe harbor: fiduciaries that objectively assess six areas, including performance, risk, fees and liquidity, would receive a presumption of compliance under ERISA. It does not require plans to offer alternatives, but clarifies how asset-allocation funds may include crypto, private equity and other nontraditional holdings. Comments were due June 1.