San Francisco based digital asset payroll and invoicing company Bitwage has launched a new product offering Bitcoin as an investment for 401(k) plans.
Bitwage's service will allow companies to offer employees the ability to invest traditional/pre-tax and roth/post-tax 401(k) dollars into Bitcoin.
According to a blog post by Bitwage CEO Jonathan Chester, the product has been in testing for 10 months, and is a product of a 4 way strategic collaboration between Bitwage, Leading Retirement Solutions, Kingdom Trust and digital asset exchange Gemini.
Chester describes the breakdown of responsibility as:
Leading Retirement Solutions provides the administration and recording keeping for the 401(k) program to ensure Department of Labor and IRS compliance, Kingdom Trust provides ... custody..., Gemini provides [the] exchange solution and Bitwage acts as a concierge for the company and employees to navigate between all four companies.
While the initial number of clients that can sign up will be limited, interested companies are being offered an online signup page.
While enterprise level digital asset investment in 401(k) in the USA is relatively new, Australia's have able to invest in digital currencies through their superannuation since 2014.
In 2014, the Australian Taxation Office (ATO) ruled that cryptocurrencies are a legitimate form of investment for Self Managed Super Funds (SMSF), provided that:
They are allowed for under the fund’s trust deed;
They comply with the fund’s investment strategy;
They comply with all relevant super legislation, just like any other SMSF investment must do. For example, SMSF cryptocurrency investments must:
be held in the fund’s name (not in the names of individual fund members), and
be valued according to ATO guidelines
As far as the writer is aware, no Australian superannuation provider has incorporated digital assets in a retail investment portfolio but some companies have been looking into the matter.
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