Crypto 401(k) proposal reaches White House final review

By Tom Whitfield

A Department of Labor proposal to permit digital assets in 401(k) plans has reached White House final review, as the defined-contribution market spans roughly 715,000 plans and an estimated $10 trillion to $14 trillion.

The proposal establishes how fiduciaries would evaluate designated investment alternatives. It does not require any retirement plan to add crypto or other digital assets to its investment options.

What would the proposal change?

The Department of Labor gives the measure the formal title “Fiduciary Duties in Selecting Designated Investment Alternatives.” Its defined review framework covers six factors:

• Performance
• Fees
• Liquidity
• Valuation requirements
• Benchmarks
• Complexity

Crypto and other alternative assets would face evaluation under that same framework. The proposal establishes a review standard rather than a universal allocation requirement.

For plan sponsors, the practical consequence would be a formal fiduciary evaluation before any menu change. It would not create automatic permission for crypto exposure.

How did the proposal reach the White House?

President Trump signed Executive Order 14330 on August 7, 2025, directing the Department of Labor to revisit its guidance under ERISA within 180 days. ERISA is the federal law governing private retirement plans.

The order called for a fresh look at alternative investments in retirement accounts. It named digital assets alongside more traditional alternative asset classes, establishing the policy basis for the current proposal.

The Department of Labor had already begun revising its approach before the order. On May 28, 2025, the department fully rescinded a 2022 warning that told fiduciaries to use “extreme care” before adding crypto options to 401(k) menus.

The proposed rule then cleared interagency review at the White House Office of Information and Regulatory Affairs on March 24, 2026. White House review marks a procedural milestone, not a change in current fiduciary obligations.

What can fiduciaries and sponsors do now?

No final rule has issued. Fiduciaries still operate under standard ERISA prudence requirements, the same legal duty of care that has always applied. The pending proposal does not supersede those standards.

Plan sponsors that want crypto exposure have generally leaned on indirect routes. These include managed funds that hold digital assets, rather than 401(k) plans holding the assets directly.

The distinction remains operationally important. Managed funds provide the current route to indirect exposure, while the proposal would create a federal process for evaluating digital assets as designated alternatives.

How large is the retirement market at issue?

The defined-contribution market could be valued between $10 trillion and $14 trillion. It encompasses approximately 715,000 401(k) plans, giving the proposed framework broad relevance for plan sponsors and investment managers.

Market size does not guarantee adoption. The proposal does not mandate that any plan add digital assets, leaving each sponsor’s investment review and menu decision in its own hands.

Under the proposed framework, sponsors would have a defined process for weighing crypto against conventional criteria. That process could change how retirement plans assess digital-asset exposure without requiring a standardized allocation across the market.

Until a final rule takes effect, managed funds remain the route most sponsors have used for indirect exposure. Existing ERISA prudence standards continue to govern those investment decisions.

The next concrete milestone is issuance of a final Department of Labor rule. Its effective date would determine when plans may begin applying the new criteria to digital assets.