Janet Yellen, the secretary of the U.S. Treasury, said at an event on Thursday that cryptocurrencies are a “very risky” option for people who are saving for their retirement.
“It’s not something that I would recommend to most people who are saving for their retirement. [. . .] To me it’s very risky investment,” she said.
She further mentioned that the U.S. Congress needs to confront the matter by ascertaining what assets can be free of taxation, just as they do for 401(k) retirement savings. She then added:
“I’m not saying I recommend it [congressional decision on tax-free assets], but that to my mind would be a reasonable thing.”
U.S. Labor Department Kicks Against Crypto for 401(k) Plans
Yellen’s comment comes after financial services company Fidelity Investments said a provision for investors to deposit 20% of their portfolio into Bitcoin as part of their 401(k) retirement is underway.
Before Fidelity Investments’ announcement in April, the U.S. Department of Labor (DOL) indicated its stance on the adoption of crypto into retirement plans, citing that investors and employees allowing their funds to be used are susceptible to loss of funds as a result of causes such as market volatility and evolving crypto regulations.
The development did not sit well with some financial institutions, like retirement plan provider ForUsAll Inc., who last week sued the Labor Department, urging them to nullify comments on the adoption of crypto into 401(k) plans.
Despite the heat from various government authorities on matters involving cryptocurrency adoption, financial institutions have not backed away from embracing the asset class.
An earlier report confirmed that Liechtenstein’s LGT Bank, the largest private asset management firm, has secured a partnership with Swiss-based SEBA Bank to enable crypto investment services as a way of expanding investment options for customers.
