Fidelity will soon begin allowing eligible individuals to save a portion of their 401(k) in Bitcoin, the company announced Tuesday. Employees will only be able to access the option if their employer signs the option, which Fidelity says will roll out in mid-2022.
While Fidelity does not specify how much employees can spend on cryptocurrency at release, Wall Street Journal reports that employees can choose to save up to 20 percent of their retirement fund in Bitcoin. Dave Gray, Fidelity’s head of retirement offerings and workplace platforms, also told the… WSJ that Fidelity plans to add support for other cryptocurrencies in the future.
“As a leader in digital assets, we are excited to be the first to offer employers exposure to bitcoin across the core set of 401(k)s that reflect our commitment to meeting their evolving needs and our belief in the promise of blockchain technology. for the future of the financial sector,” said Gray.
As noted by Fidelity, business intelligence firm MicroStrategy is the first to announce it has adopted the Bitcoin retirement fund option. The company, led by Bitcoin proponent Michael Saylor, acquired $250 million in Bitcoin in 2020 and continued to buy the cryptocurrency as part of its financial strategy. However, the Securities and Exchange Commission (SEC) objected to the way MicroStrategy accounted for its Bitcoin assets in one of its SEC filings last year. According to BloombergMicroStrategy used non-GAAP measures, or revenue reporting methods that are not based on generally accepted accounting principles (GAAP), to account for the digital assets.
This wasn’t MicroStrategy’s first meeting with the SEC — in 2000, the SEC settled Saylor and other executives $11 million over charges of civil accounting fraud, claiming that the company “significantly overestimated its revenue and earnings” after MicroStrategy in June 1998. to March 2000. The executives paid the $10 million waiver and a $350,000 civil fine for each, without “admitting or denying the Commission’s allegations.”
Fidelity may face some opposition from its new offering. Last month, the U.S. Department of Labor warned fiduciaries against offering an option to save for retirement in cryptocurrency “in an effort to protect the retirement savings of U.S. employees,” citing that such investments “pose significant risks and challenges for participants with bring along”. retirement accounts, including significant risks of fraud, theft and loss.” President Joe Biden has also signed an executive order designed to push for more crypto regulation in the US.