Trump Directs 401(k) Crypto Inclusion and Bans Banking Discrimination

President Donald Trump signed two executive orders on August 7, 2025, aimed at reshaping the regulatory landscape for digital assets within the U.S. financial system. The first order instructs the Department of Labor to reassess current restrictions on including alternative assets—such as private equity, real estate, and cryptocurrencies—in employer-sponsored 401(k) retirement plans. This directive seeks to revise interpretations under the Employee Retirement Income Security Act (ERISA), which currently limits such inclusions. In parallel, it directs the Securities and Exchange Commission and the Department of the Treasury to explore regulatory updates that may expand retail investor access to digital assets through accredited investor pathways [1].

The second executive order targets what the administration describes as discriminatory banking practices by prohibiting federal regulators from using "reputational risk" as a rationale to block or discourage banks from servicing crypto firms. This terminology, previously employed by institutions like the Federal Reserve, has faced criticism for being used to justify account closures and limit financial services for crypto-related businesses. The order aligns with prior commitments from the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) to cease using reputational risk as a supervisory standard [2].

The move has garnered praise from several Republican lawmakers. House Financial Services Committee Chair French Hill described it as an important step toward preventing politically motivated financial discrimination, while Senator Cynthia Lummis stated it introduces transparency and accountability to what she views as regulatory overreach [1].

Industry experts have also responded favorably. Gerry O’Shea of Hashdex highlighted that the directive allows retirement plan sponsors to collaborate with digital asset experts to develop safe and structured methods for incorporating crypto into long-term investment portfolios [1]. The orders signal a broader effort to integrate digital assets into mainstream financial systems, reinforcing a policy shift that aligns with Trump’s broader vision for U.S. leadership in the global crypto space.

This initiative follows prior efforts, such as the establishment of a strategic digital asset reserve and a national plan to promote U.S. crypto leadership. By enabling 401(k) plans to hold cryptocurrency, the administration aims to increase retail investor access to digital assets, potentially transforming the landscape of retirement investing in the United States.

Sources:

[1] Trump Opens 401(k) Plans To Crypto, Cracks Down On ... (https://www.benzinga.com/crypto/cryptocurrency/25/08/46984531/trump-opens-401k-plans-to-crypto-cracks-down-on-crypto-banking-discrimination)

[2] Trump Executive Orders Expand Crypto Access in 401(k)s ... (https://www.ainvest.com/news/trump-executive-orders-expand-crypto-access-401-crack-debanking-2508/)