The Trump administration has taken another step toward allowing cryptocurrencies and other alternative assets inside 401(k) retirement plans. On Thursday, the US Department of Labor sent a proposed rule to the White House’s Office of Information and Regulatory Affairs, which reviews federal regulations before they are published.

The filing is tied to President Donald Trump’s executive order directing the department to make room for alternative investments in workplace retirement accounts. If advanced, the proposal could broaden the range of assets available in 401(k) plans to include digital assets and other nontraditional investments.

Rulemaking moves into White House review

The Office of Information and Regulatory Affairs, a unit within the Office of Management and Budget, examines federal rules before they move forward. By submitting the proposal there, the Labor Department has pushed the effort into a formal review stage rather than leaving it at the agency drafting level.

The administration’s latest move builds on a policy process that has been underway for months. Earlier, the Labor Department released an initial rule describing steps 401(k) plan managers should take when weighing whether to add alternative assets to retirement offerings.

What the proposal says about fiduciary decisions

In its filing, the Labor Department said any clarification should help fiduciaries determine how to prudently weigh the trade-offs involved in these investments. The agency said those standards must address how plan decision-makers balance potentially higher expenses against the goals of stronger long-term net returns and broader diversification.

The filing does not present the issue as cost-free. When discussing the expected costs and benefits of the rule, the department said it was still considering the cost side of the equation.

Crypto and private equity are part of the discussion

The broader effort is not limited to cryptocurrencies alone. The department’s earlier materials addressed alternative assets more generally, including digital assets and private equity, as categories that plan managers might consider for inclusion in investment menus.

That framing suggests the administration is working on a wider opening for nontraditional assets in 401(k) plans, with crypto one of the most closely watched components of the proposal.

Political opposition remains in place

The idea of permitting crypto exposure in retirement accounts has already drawn criticism in Washington. Earlier this year, Senators Bernie Sanders and Elizabeth Warren urged the Labor Department to withdraw the rulemaking effort.

They argued that allowing such investments would expose retirement savers to volatile assets, including crypto. Their objections underline that, even as the proposal advances procedurally, it remains politically contested and is still under review rather than finalized.

What comes next

The immediate next confirmed step is the White House review through OIRA. That process will determine whether the proposal is cleared for publication in a further stage of the federal rulemaking process.

For now, the Labor Department has signaled its direction but has not completed the rule. Questions around how fiduciaries should evaluate costs, diversification and long-term return objectives remain central as the administration’s proposal moves ahead.

Source: www.theblock.co