US Congressman Byron Donalds has introduced a bill that would allow Americans to include Bitcoin and other crypto-currencies in their 401(k) retirement savings plans
The 401(k) retirement savings plan is one of the most widely used in the United States. It is a tax-free, funded savings plan that allows employees to invest a portion of their salary in various investments. This invested part is thus not subject to taxes and will only be taxed once the capital is withdrawn, i.e. at retirement age.
The capital stock saved is generally entrusted to pension funds which will invest this money in investment portfolios (stock market or bank bonds, shares, etc.) in order to make the contributors’ savings grow. One of the largest pension funds in the US is Fidelity.
We learned this Friday 20 May that US Congressman Byron Donalds has formulated a bill that would allow Americans to add assets such as Bitcoin and other crypto currencies to their 401(k) retirement savings plans. The bill echoes the Financial Freedom Act introduced in early May by Senator Tommy Tuberville.
Both bills were formulated in response to new regulatory guidelines proposed by the US Department of Labor. The latter regulates which assets can and cannot be offered to savers in the 401(k) retirement plan and has taken a negative stance on the introduction of crypto currencies into pension funds’ investment portfolios.
This position is criticised by the opposition, which denounces a desire to “centralise power in Washington” and “hinder the freedom of the economy and markets”.
However, Bryon Donalds’ bill seems to be supported by a part of the American political class, notably in the House of Representatives. Names like Young Kim, David Schweikert and Tom Emmer seem to be standing by it. The crypto-currency industry also seems to be in favour of this new bill and supports Mr. Donalds.
We should have more information in the coming months.
Bitcoin’s inclusion in US savings plans an important decision for pension funds
This political decision could have strong repercussions for Fidelity, the largest provider of 401k savings plans in the US. Fidelity had proposed a plan in April that would allow its savers to invest up to 20% of their capital in Bitcoin