House Bill Aims to Protect Bitcoin Retirement Accounts From Federal Ban

Rep. Byron Donalds (R-FL) filed the measure, which is the House companion to the Financial Freedom Act of 2022, with co-sponsors Warren Davidson (R-OH), Young Kim (R-CA), David Schweikert (R-AZ), and Tom Emmer (R-MI) (R-MN).

The law, if passed, would ban the US Labor Department from limiting the types of investments that 401(k) account holders can choose from, including Bitcoin, which Fidelity hopes to make available later this year.

According to a news release, the law was prepared in response to the Employee Benefits Security Administration's regulatory recommendations issued on May 10, which say that crypto should not be included in 401(k) plans. According to a press release, Donald's bill attempts to "defend American investors" against what he and his co-sponsors see as a "gross example of government overreach."

Fidelity was the first brokerage to announce plans to start providing Bitcoin as a 401(k) investment option last month. Democratic Senators Elizabeth Warren and Tina Smith expressed suspicion and anxiety over the action. Warren has long been a vocal opponent of cryptocurrencies, describing them as a "danger to our financial stability and economy."

The Department of Labor has raised its reservations about Fidelity's decision to accept Bitcoin into its retirement accounts. "We have major concerns with what Fidelity has done," Ali Khawar, the acting assistant secretary of the Employee Benefits Security Administration (EBSA), told the Wall Street Journal, citing Bitcoin's volatility.