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.
Several U.S. state and municipal pension funds have already dabbled in cryptocurrencies. The Wisconsin Investment Committee invested $164 million in a Bitcoin ETF in May. Michigan invested $6.6 million in a Bitcoin ETF in July and will expand its digital asset investments in November 2024.
Florida Chief Financial Officer Jimmy Patronis has pushed for the inclusion of Bitcoin in the state pension plan, calling it "digital gold." He said on CNBC that cryptocurrencies are not going away and emphasized Bitcoin as a tool to fight inflation and central bank digital currencies.
