According to Cointelegraph, Allie Itami, a lawyer at Lathrop GPM, said that it is easier for U.S. state pension plans to allocate part of their assets to cryptocurrencies than private pension plans.
Private pension plans are subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 (ERISA). EBSA, the enforcement agency of ERISA, advises private pension plans to invest in digital assets with caution due to the early stage and volatility of cryptocurrencies.
Crypto market inflows into retirement investment accounts are primarily led by state pension plans, as private pension managers face fiduciary responsibilities due to strict enforcement of ERISA.
Pension funds from multiple states and municipalities in the United States have ventured into cryptocurrency. The Wisconsin Investment Board invested $164 million in a Bitcoin ETF in May. Michigan invested $6.6 million in a Bitcoin ETF in July and plans to expand its digital asset investments in November 2024.
Florida's Chief Financial Officer Jimmy Patronis is advocating for the inclusion of Bitcoin in the state pension plan, calling it 'digital gold.' He stated on CNBC that cryptocurrency will not disappear and emphasized Bitcoin as a tool against inflation and central bank digital currencies.
