Fidelity recently revealed plans to become the first major retirement-savings provider to add Bitcoin to their 401(k) plans. The US Department of Labor (DOL) is however not enamored with the plan.
DOL expresses grave concerns about Fidelity’s plan
The Wall Street Journal (WSJ) reports that the body which oversees employer retirement savings plans has said it will meet with Fidelity to communicate its concerns.
Ali Khawar, acting assistant secretary to the DOL’s Employee Benefits Security Administration (EBSA), told the WSJ that the agency considers cryptocurrencies too speculative to be added to the retirement savings plans of average Americans, and is driven by a lot of hype.
“We have grave concerns with what Fidelity has done… For the average American, the need for retirement savings in their old age is significant,” he is quoted saying.
The concern is a continued theme from the recent notice the DOL put out warning retirement savings plan providers of the dangers of including the volatile and speculative assets in 401(k) plans.
In response, Fidelity told the WSJ that its Bitcoin offering is in response to the growing demand for digital assets and part of its commitment to “evolving and broadening” services in the niche.
Fidelity has previously noted that its offering is designed to be secure and protect investors. The firm caps the amount subscribers can allocate to the account to 20% of total savings, and will also use its industry-grade custody platform to hold the fund’s Bitcoins.
Fidelity’s first customer not backing out
Along with the announcement of the release of the savings plan, Fidelity revealed that MicroStrategy had signed up to be its first customer. Despite the DOL’s concern, MicroStrategy does not appear to be backing out.
Commenting on the report of the DOL’s fears, Micheal Saylor, the enterprise software company’s CEO, stated that Bitcoin is a great way to diversify retirement accounts. Bitcoin is especially suited for this purpose as equities and bonds are no longer as strong as they used to be.
“Bitcoin is an excellent alternative asset for retirement accounts, at a time when equities appear increasingly risky and bonds seem structurally defective due to the macroeconomic environment. We need to educate regulators on the benefits of Bitcoin,” Saylor tweeted.
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