Bitcoin proponent Sen. Cynthia Lummis said on Tuesday that she would like to see US residents diversify their retirement accounts by being able to include cryptocurrency investments.
Lummis, the first woman from Wyoming to be elected to the Senate, said she supports people investing in cryptocurrencies of their choice, if they are legally permissible.
“I would like to see cryptocurrency, like bitcoin, become part of a diversified asset allocation that are used in retirement funds and other opportunities for people to save for the future,” the Republican senator said during CNBC’s Financial Advisor Summit on Tuesday.
“So whether you’re an employee that has a retirement fund – I’d like to see those retirement funds invested in bitcoin and other cryptocurrencies that are good stores of value – but I’d also like to see individuals be able to use bitcoin and cryptocurrencies of their preference that are safe, that have met the hurdles of anti-money laundering and Bank Secrecy Act.”
The Internal Revenue Service considers bitcoin to be property rather than currency, for tax purposes. This means any transaction involving digital currencies will get the same treatment as sales of stocks and other intangible property.
But incorporating cryptocurrencies into retirement portfolios still remains a niche practice, because they can’t be included in regular Individual Retirement Accounts. Investors need to set up a special type of IRA that is more actively managed by an account holder rather than a third-party service.
Plan sponsors are still unlikely to want to adopt cryptocurrencies into their investment line-up, Aaron Pottichen, a senior vice president at Alliant Retirement Consulting, told CNBC earlier this month.
Lummis, who bought her first bitcoin in 2013 for $330, revealed she owns 5 bitcoins, currently worth about $170,000.
Bitcoin was last trading 2% lower at $34,837 on Wednesday, but it’s up about 20% so far this year.
Despite the senator’s bullish support for the digital asset, she said: ” I don’t want everybody putting all their money in bitcoin just like I don’t want everybody putting it in dollars and putting it under a mattress. I like diversification.”
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