Trump Executive Order Eases Crypto Banking Restrictions and 401(k) Access

President Donald Trump signed a new executive order on August 7, 2025, aimed at addressing what the administration has described as “unfair” regulatory practices targeting the cryptocurrency industry by federal banking authorities [1]. The directive removes the concept of reputational risk—previously used by the U.S. Federal Reserve as part of its oversight criteria—from the regulatory framework governing financial institutions. This term had been increasingly cited in decisions affecting crypto-related businesses, with critics arguing it was being used to justify restrictions on the industry [2].

The White House issued a memo stating that the digital assets sector had been subjected to “unfair banking disruptions” that had undermined public trust and imposed economic burdens on American workers [3]. The order, which follows a growing chorus of complaints from crypto firms and individuals over banks closing their accounts without explanation, marks the official end of what the industry has labeled “Operation Choke Point 2.0.” The term, first used in 2023 by Nic Carter, co-founder of Castle Island Ventures, alludes to a similar initiative from the Obama administration in 2013 that restricted banking services for high-risk sectors [4].

The move reflects a continuation of Trump’s broader pro-crypto policy agenda, which includes a series of executive orders signed in late July and early August 2025 to expand investment access to alternative assets such as cryptocurrencies within retirement accounts like 401(k)s [5]. One key directive instructed the U.S. Department of Labor to revise its guidance to make it easier for employers to include digital assets like Bitcoin in 401(k) plans, potentially allowing millions of retirement savers to directly invest in cryptocurrencies [6]. This could significantly broaden the asset class’s appeal among mainstream investors.

Another executive order focused on preventing federal regulators from imposing what the administration described as “burdensome rules” on financial institutions offering crypto-related services [7]. Together, these measures signal a clear intent to reduce regulatory hurdles and foster innovation in the financial sector, aligning with the administration’s broader pro-market stance.

Industry observers have interpreted the policy shifts as a sign of Trump’s administration supporting diversified and high-risk investment options, especially in a time of growing demand for alternative assets [8]. The simultaneous easing of restrictions on private equity, real estate, and crypto within retirement accounts underscores a strategy to make these investments more accessible to retail investors [9].

The timing of the orders, just before the 2025 U.S. election, has drawn additional attention, highlighting the administration’s alignment with financial industry interests and its commitment to deregulation in key sectors [10].

The actions have been reported by multiple financial outlets, including Bloomberg, TheBlock, and CoinCentral, with coverage emphasizing the potential economic implications of the policy changes [11]. Analysts and market observers suggest that the orders could lead to increased demand for cryptocurrencies as investment vehicles, potentially accelerating broader institutional adoption [12].

Sources:

[1] https://www.bloomberg.com/news/articles/2025-08-07/trump-to-sign-order-easing-path-for-private-assets-in-401-k-s

[2] https://www.theblock.co/post/366046/trump-signs-executive-order-allowing-401k-plans-to-include-digital-assets

[3] https://news.bitcoin.com/trump-signs-2-executive-orders-that-could-boost-crypto-markets/

[4] https://www.theblock.co/post/366053/president-trump-signs-executive-order-to-stop-unfair-banking-of-crypto-industry

[5] https://www.credaily.com/briefs/401k-access-expands-to-private-equity-real-estate-and-crypto/

[6] https://m.economictimes.com/markets/cryptocurrency/trump-opens-the-door-for-private-equity-and-crypto-as-401k-retirement-plan-options/articleshow/123179205.cms

[7] https://sherwood.news/crypto/cryptos-surge-as-trump-signs-executive-order-allowing-the-assets-in-401-k-s/