US Treasury Secretary Janet Yellen warns that cryptocurrencies are a “very risky investment”, adding that she would not recommend them to most people who are saving for retirement. However, Yellen noted that Congress could restrict the type of investments allowed in retirement accounts, including 401(k) plans.
Janet Yellen on investing in crypto for retirement
The issue of whether Americans should be able to put their retirement savings in cryptocurrencies continues to be hotly debated.
US Treasury Secretary Janet Yellen was asked Thursday at an event hosted by the New York Times about Fidelity’s announcement to allow bitcoin as an investment option in 401(k) plans.
It’s not something I would recommend to most people who are saving for retirement… For me it’s a very risky investment.
Fidelity’s announcement followed guidance issued by the Department of Labor (DOL) warning 401(k) plan administrators about allowing cryptocurrencies in retirement plans. Fidelity is one of the largest administrators of 401(k) plans.
Ali Khawar, acting deputy secretary for the DOL’s Employee Benefits Security Administration, said the Department of Labor has “serious concerns with what Fidelity has done.” He stressed that “cryptocurrencies can present serious risks to retirement savings.”
Treasury Secretary Yellen also said Thursday that Congress could regulate which assets could be included in retirement plans like 401(k). Commenting on whether Congress should take action, Yellen clarified:
I’m not saying I recommend it, but in my opinion it would be reasonable.
Efforts by the Department of Labor to restrict Americans from putting cryptocurrency in retirement accounts have upset some lawmakers. In response, US Senator Tommy Tuberville (R-AL) introduced the Financial Freedom Act to prohibit the DOL from “issuing regulation or guidance that limits the type of investments self-directed 401(k) investors may choose through from a brokerage window. .” Additionally, the Department of Labor has been sued for its crypto guidance.
What do you think of Treasury Secretary Janet Yellen’s comments? Let us know in the comments section.
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