The appointed US Treasury Secretary, Janet Yellen, had a rough relationship with the cryptocurrency sector. Recently, she claimed that investment vehicles should be banned from adding cryptocurrencies to retirement funds. She further exclaimed that it is the responsibility of the financial regulators in the country to ensure that the act is made moratorium.
It is worth noting that Yellen made her latest remarks following the latest statement issued by Fidelity management. Fidelity recently decided to provide a cryptocurrency diversification option for the retirement plan for workers. The latest remarks of Yellen are considered a response to Fidelity management.
Regulation Of Crypto Retirement Plans
Fidelity has opened up Bitcoin options for users who have a 401K account with the financial management firm. It is worth noting that all savings programs go through a massive amount of regulatory scrutiny. Therefore, it is natural to see Treasury Department taking an active interest in monitoring the changes.
Another financial regulator to participate in the debate is the US Department of Labor. The DoL has also reiterated the warning of the Treasury Secretary and issued a warning against using cryptocurrencies as a diversification option for 401K account holders. Yellen has claimed that Congress members should step forward and ban the addition of cryptocurrencies such as Bitcoin in taxed and untaxed retirement accounts.
Senator Cynthia Lummis who is known for her pro-crypto stance has also come forward to defend the position of cryptocurrencies in the matter. It is worth noting that 401k and retirement accounts are a fixed percentage of the salary that workers agreed to as their retirement option. Private financial enterprises like Fidelity use the money to invest in different options to generate returns on behalf of their clients.
Lummis believes that state agencies should not be hostile toward the idea of providing a crypto investment option. She claimed that Bitcoin has two major use cases one as a store of value and the other as a portfolio diversifier.
She also pointed out that having more diversification options such as Bitcoin is a smart decision. She further claimed that Bitcoin and cryptocurrencies can prevent the investment of the retirement account holders from depleting over time by the way of generating massive returns for them.