US-based Fidelity Investments – the country’s largest retirement plan provider – plans to offer its customers the option of investing their retirement funds in Bitcoin (BTC), according to a report of The New York Times.
While the plan is still pending regulatory approval, the development could bolster crypto adoption nationwide, as Fidelity has around 23,000 corporate customers. The move could result in several first-time buyers of Bitcoin who previously had no exposure to the digital asset.
Fidelity 401(k) to introduce Bitcoin investments
Speaking on the development, Fidelity’s Head of Workplace Retirement Offerings and Platforms, Dave Gray, said:
We started to hear growing interest from plan sponsors, organically, how Bitcoin or how digital assets could be offered in a retirement plan.
The company said MicroStrategy has agreed to join the plan.
According to the report, Fidelity plans to make the investment option available by mid-2022, with a maximum investment cap of 20% that the employer would determine.
The company also plans to charge less than 1% of account assets as a fee. Additionally, it intends to introduce “competitively priced” trading fees.
With this offering, Fidelity continues to integrate crypto into its core business. He already has a Trading Bitcoin ETFs in Canada and made several pro-crypto movements in 2022.
The US Department of Labor’s View on Crypto
The US Department of Labor has not banned crypto investments in pension plans at this time. However, the department revealed its reluctance to endorse digital assets as a retirement investment plan in a compliance document released in March.
Part of the document reads as follows:
These investments present significant risks and challenges to participants’ retirement accounts, including significant risk of fraud, theft and loss.
This reluctance, coupled with the growth of traditional investment firms offering crypto exposures to their clients, led Fidelity Investment to write to the agency about the need for advice to help the space.
Pension funds and crypto
Notably, reports emerged last year that Australia’s fifth-largest pension fund, Queensland Investment Corporation (QIC), was looking to invest in the crypto space, especially as the industry sees more maturity and regulations.
Meanwhile, US pension funds Fairfax County Police Officers Retirement System and Fairfax County Employees’ Retirement System have also shown interest in investing in crypto.
However, most pension funds are mistrustful crypto investments due to the high level of risk and volatile nature of cryptocurrencies.