In the wake of last week's crypto crash, which drew the attention of regulators and government officials, a group of Republicans in Congress today introduced a bill that would “protect” investors' ability to add Bitcoin to 401(k) retirement plans.
The bill, the House companion of the Financial Freedom Act of 2022, was introduced by Rep. Byron Donalds (R-FL) with support from fellow representatives Warren Davidson (R-OH), Young Kim (R-CA), David Schweikert (R-AZ), and Tom Emmer (R-MN).
If passed, the bill would prevent the U.S. Labor Department from restricting the type of investments that 401(k) account holders can select, including Bitcoin—something that Fidelity plans to make available later this year.
According to a press release, the bill was drafted in response to regulatory guidance released by the Employee Benefits Security Administration on May 10, which suggests that investors should be prevented from adding crypto to 401(k) plans. Donalds’ bill aims to “protect American investors” from what he and his co-sponsors consider a “gross example of government overreach, the congressman said in a release.
Today, I introduced the House companion of the Financial Freedom Act of 2022. This bill prohibits Biden's @USDOL from restricting the type of investments that self-directed 401(k) account investors can choose. The great @SenTuberville is championing this bill in the U.S. Senate. pic.twitter.com/c5zOJUEzCN
— Congressman Byron Donalds (@RepDonaldsPress) May 20, 2022
Last month, Fidelity became the first brokerage to announce plans to begin offering Bitcoin as an investment option in 401(k) accounts. The move was met with skepticism and concern from Democratic Senators Elizabeth Warren and Tina Smith. Warren has long been a critic of cryptocurrencies, and has previously referred to digital assets as a "risk to our financial stability and economy."
The Department of Labor has expressed its own concerns about Fidelity opening its retirement accounts to Bitcoin. Citing Bitcoin's volatility, Ali Khawar, the acting assistant secretary of the Employee Benefits Security Administration (EBSA), told the Wall Street Journal, "We have grave concerns with what Fidelity has done.”