US Labor Department criticized Fidelity’s proposal to invest retirement in bitcoin

The department’s concerns stem from the volatility of the first cryptocurrency

29.04.2022 - 16:45

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2 min

What’s new? The US Department of Labor has expressed concerns about a new proposal for customers of the Fidelity Investments holding company to invest a portion of their retirement savings in bitcoin. Ali Khawar, acting assistant secretary of the Employee Benefits Security Administration, told The Wall Street Journal that the agency’s concerns stem from the volatility of the first cryptocurrency.

Information on The Wall Street Journal website

What else did Khawar say? According to him, the average US citizen has a significant need for retirement savings. The agency believes that the Fidelity initiative “risks the retirement security of Americans.” Khawar added that the Department of Labor has scheduled a meeting with representatives of the finance company.

What is known about Fidelity? It is a US holding company that manages $4,2 trillion in assets. It became one of the first international financial institutions to enter the cryptocurrency market when it launched its digital asset division in October 2018. About 23 000 companies use its services.

What happened before? On April 26, Fidelity Investments stated that it would allow 401(k) retirement savings account holders to directly invest in bitcoin. The new retirement investment plan in cryptocurrency will go into effect in late 2022. If approved by employers, retirees will be able to invest up to 20% of their savings in bitcoin. MicroStrategy has already agreed to participate in the new program.

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