US Labor Department Raises Concern Over Fidelity Crypto Investment Product
- Fidelity Investments announced plans to enable Bitcoin investment with 401(K) plans in the US.
- News of the option to include Bitcoin in its 401(K) accounts has raised concerns.
- Last week, Fidelity Investments launched Web3-focused ETFs targeting younger clients.
It has been a busy final week of the month for the financial industry and the crypto market.
This week, US investment bank Goldman Sachs announced it was exploring the tokenization of financial securities. Last month, Goldman carried out its first over-the-counter (OTC) trade with Galaxy Digital.
On Thursday, Wall Street’s crypto first-mover Goldman offered its first Bitcoin (BTC) backed loan facility on Thursday.
Also taking strides into the crypto world is Fidelity Investments. Fidelity’s latest move, however, has caught the eye of the US Labor Department.
US Labor Department Raises Concerns over Fidelity’s 401(K) Plans
On Thursday, the Wall Street Journal reported concerns among Labor Department officials about Fidelity Investment’s plan to allow investors to put Bitcoin (BTC) in their 401(K) accounts.
According to the report, acting assistant secretary of the Employee Benefits Security Administration, Ali Khawar, said,
“We have grave concerns with what Fidelity has done.”
Khawar reportedly also discussed the hype around Bitcoin and the broader crypto market and the speculative nature of cryptocurrency investments.
The US Labor Department responded to news of Fidelity’s plans to widen the crypto net.
This week, Fidelity Investments announced plans to offer digital asset investment as part of US retirement plans.
According to the report, MicroStrategy has already signed up for the offering. It remains to be seen whether the Labor Department will scupper Fidelity’s goal to offer crypto to a wider investment audience.
Fidelity Investments Goes All in on Crypto and Web3
Last week, Fidelity Investments launched two web3 ETFs to target a younger customer base.
Fidelity Investments launched the Fidelity Crypto Industry and Digital Payments ETF (FDIG) and the Fidelity Metaverse ETF (FMET).
Both ETFs have a net expense ratio of just 0.39 and provide investors an easy opportunity to gain exposure to cryptos and web3. The latest offering followed some bullish projections on the metaverse.
US banking giants Citi and JPMorgan have drawn headlines with bullish projections for the metaverse.
In March, Citi projected a $13 trillion metaverse by 2030, with JPMorgan projecting a $1 trillion in metaverse-related yearly revenues.