In the US, Cryptocurrency has become the latest political flashpoint. Last month Fidelity Investments’ announcement of offering bitcoin as an investment option in its 401(k) plans by the middle of the year, ruffled a few feathers.
One of them is the long-time crypto critic Sen. Elizabeth Warren who expressed concern that the investment firm might be exposing clients to a “risky and speculative gamble.”
Republicans defended Fidelity by accusing Democrats of “governmental overreach and infringing on Americans’ free-market rights.”
On 20th May, Republicans floated a new bill dubbed “The Financial Freedom Act” which aimed at preventing the Labor Department from restricting investment options available to employees in self-directed retirement accounts.
The proposed bill if passed might enable Americans to add cryptocurrency to their 401[k] plans if they choose to do so.
Interestingly, the decision by Fidelity followed after the Labor Department warned that firms investing their employees’ contribution plans in digital assets including Bitcoin, would invite legal action.
In a notice dated March 10, the DOL Employee Benefits Security Administration said fiduciaries “must exercise extreme care” before including direct investment options in crypto.
Fidelity objected to that guidance, and shot out a letter saying that the DOL failed to provide information on how fiduciaries can “fulfill their fiduciary duties in assessing cryptocurrencies.”
US’s DOL vs Fidelity
Remaining defiant, the investment firm has announced that it will allow customers to put 20% of their savings into bitcoin; other cryptocurrencies will likely be added later.
Sen. Tommy Tuberville, R-Ala who also oversaw similar crypto-friendly legislation stated,
“The government has no business standing in the way of retirement savers who want to make their own investment choices,” Tuberville said. “When you’ve earned your paycheck, how you invest your money should be your decision. Our legislation makes sure that is the case.”
While Republicans and Democrats might exploit crypto for political mileage, one thing is certain, crypto has broadened the scope of investment among individuals of all ages.
Not just biggies but even lesser-known firms have been instrumental in making virtual currencies more mainstream.
A Nebraska-based crypto wallet firm Exodus pays its staff in bitcoin. One of its employees, Denver native Alyssa Howell managed to finance a house and save for retirement with her cryptocurrency earnings.