Fidelity Investments Makes Moves To Allow Clients Use BTC In Their 401K

The Wall Street Journal published, on Tuesday, that Fidelity Investments will make it possible for investors to create a Bitcoin wallet in their 401(k) retirement pension and investment programs.

Fidelity Takes the First Leap in Adding Bitcoin to Retirement Plans

One of the world’s leading investment companies, Fidelity, is making arrangements to allow clients to add BTC to their welfare 401(k) plans. This is a major milestone for the prominent corporation. This announcement was made by Dave Gray, the company’s head of corporate retirement solutions and systems.

MicroStrategy To Be First Client in Fidelity’s New Initiative

As per the WSJ, all 23,000 corporations that employ Fidelity to manage employee pension schemes will now be enabled to add Bitcoin savings to the programs later in the year 2022.

Fidelity also stated that MicroStrategy would subsequently become the first client to use this BTC 401k service. This is not unusual considering that the technology powerhouse has about 130,000 BTC on its ledger already.

The news comes right after U.S President Joe Biden decided to sign an executive order in March mandating that the government should study the dangers and benefits of developing a central bank digital currency, as well as other cryptocurrency concerns.

Fidelity Set to Provide Asset Management Training

The new accounts, which are part of a “proprietary offering” dubbed Digital Assets Accounts, will be held on the firm’s Digital Assets platform and available to 401(k) plan sponsors and participants. By the middle of the year, employers will have full access to the service.

Through participating 401(k) plans, investors will have access to Fidelity’s Digital Assets Accounts (DAAs), which will store Bitcoin and short-term money market assets. Plan sponsors are ultimately responsible for “choosing to provide” the accounts and establishing contribution and exchange restrictions. Clients also gain access to asset education, which the corporation claims would “help them make informed decisions.”

Bitcoin Isn’t the Only Star: Altcoins are Also On The Table, Says Fidelity

To meet the needs of corporate investors, Fidelity increased its blockchain-based portfolio by nearly 70% in 2021. Integration for Ether was also a possibility being explored by the financial services firm, even though it will not be made accessible until at least August. As per Tom Jessop, president of Fidelity Digital Assets, Fidelity was also working to enable trades to run smoothly “for most of the week.” Digital assets, unlike conventional financial markets, exchange 24 hours a day, seven days a week.

In a statement by Dave Gray, corporations remain culpable for constraining member donations as well as transfers within the DAA to a set rate of a member’s overall amount. Employee contributions of as much as 20% every cycle and exchange limits of up to 20% of total account value are available to plan fiduciaries.

MicroStrategy, a publicly-traded business analytics company, is the first to give the feature to its employees, according to Fidelity. At the end of 2021, the company had 2,121 employees, with 796 of them headquartered in the United States.

Ronald Henderson

Ronald has worked in the computer industry for 5 years when he decided to stand on his own and start his own firm, and he's never looked back. A real hard-worker and go-getter, he is a powerful leader and has made quite a name for himself in the industry. Born and raised in Pennsylvania, he still resides there with his wife and two kids, Mark and Gene. He believes that simplicity is the key to everything in life, including writing, and loves to make his content engaging and easy to understand for all audiences - even those who aren’t necessarily from a technical background.