Bitwage Rolls Out Bitcoin 401(k) Plan With Help From Gemini

The crypto payroll provider claims its "world's first" bitcoin 401(k) plan can help U.S. companies cross the crucial 75% threshold with their small business loans.

AccessTimeIconMay 26, 2020 at 1:09 p.m. UTC
Updated May 9, 2023 at 3:08 a.m. UTC

Employers struggling to meet the conditions set by the U.S. government's loan program may find salvation in an unlikely place: a new bitcoin 401(k) plan from Bitwage.

Calling the product a world first, the crypto payroll company said Tuesday it had successfully trialed its bitcoin 401(k) employee pension account and would start offering the plan to companies – especially those trying to meet the 75% payroll requirement in the federal Paycheck Protection Program (PPP).

  • How Blackbird Brings Dining Experiences On-Chain
    00:54
    How Blackbird Brings Dining Experiences On-Chain
  • Breaking Down Solana's Triangle Pattern
    00:58
    Breaking Down Solana's Triangle Pattern
  • Trump Chooses Pro-Crypto VP Candidate; Kraken Signs Deal With Tottenham Hotspur
    02:27
    Trump Chooses Pro-Crypto VP Candidate; Kraken Signs Deal With Tottenham Hotspur
  • Blockchain Is Becoming 'Wall Street 2.0': Discover Crypto CEO
    00:53
    Blockchain Is Becoming 'Wall Street 2.0': Discover Crypto CEO
  • The PPP has proven to be a lifeline for U.S. businesses struggling in the coronavirus pandemic. A total of $660 billion has been lent out nationwide by the Small Business Administration (SBA). To incentivize staff retention, the program offers 100% loan forgiveness if employers spend at least 75% of funds received on payroll expenses.

    Crucially, the SBA includes things such as retirement benefits in the bucket of payroll expenses, says Bitwage. It adds that devoting some of the loans into 401(k) plans can count towards hitting the crucial 75% target.

    "This gives companies an opportunity to provide matching or profit sharing contributions to employee 401k accounts in order to help close the gap to receive full loan forgiveness," Bitwage said in a press release. "Together with the PPP program, the Bitwage Bitcoin 401(k) Plan allows employers to get more out of their PPP loans, while providing their employees new and innovative investment options."

    Based in San Francisco, Bitwage wants to integrate cryptocurrencies into everyday life. Company clients can use Bitwage to offer their employees the option to have their wages paid in crypto. Although its primary focus remains on the U.S. it has set its sights on a more global clientele, offering fiat support in more than eighteen different currencies.

    The Bitcoin 401(k) plan is a collaboration with three other firms: crypto exchange Gemini, the custodian service Kingdom Trust, as well as the established pension provider, Leading Retirement Solutions, who keep records for the 401(k) plan with the Department of Labor and the Internal Revenue Service (IRS).

    "Our vision includes integrating a cryptocurrency trading engine directly inside of the 401(k) Plan so institutional as well as retail investors have access to the same exchange-grade trading tools inside of tax-incentivized retirement accounts," Bitwage said.

    Although Bitwage's plan is geared toward employers interested in offering bitcoin, employees can also choose to gain exposure to traditional asset classes too, including equities and bonds, via its link-up with Leading Retirement Solutions.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Read more about