Federal Administration Endorses Cryptocurrency in 401(k) Plans; Banks May Face Consequences for Discontinuing Services
President Trump Signs Executive Order to Expand Crypto and Other Alternative Assets in 401(k) Plans
On August 7, 2025, President Donald J. Trump signed a new executive order titled "Democratizing Access to Alternative Assets for 401(k) Investors." This order aims to broaden the range of assets that can be included in 401(k) retirement plans, including digital assets (cryptocurrency), private equity, private credit, and real estate.
The executive order instructs the U.S. Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to facilitate and expand 401(k) investors' access to alternative assets. To achieve this, the DOL is directed to reexamine and clarify its guidance under the Employee Retirement Income Security Act of 1974 (ERISA) related to plan fiduciaries’ duties when offering alternative asset investments in 401(k) and other defined contribution (DC) plans.
One of the key changes in the executive order is the update to the fiduciary standard. The DOL has rescinded its 2022 guidance requiring fiduciaries to exercise "extreme care" regarding crypto in 401(k) plans, replacing it with a “facts and circumstances” standard. This means that fiduciaries must prudently evaluate crypto and other alternative investments just like any other investment, rather than imposing per se restrictions.
The order also directs the DOL to coordinate with the Treasury, SEC, and other regulators to consider parallel rule changes to make access to alternative assets easier and safer for retirement plans. The primary policy goal is to expand investment choice to the over 90 million Americans with employer-sponsored DC plans, promoting diversification and potentially higher risk-adjusted returns for retirement savings, similar to options available to wealthy investors or public retirement plans.
This order builds upon prior DOL guidance from 2020 that allowed private equity investments in DC plans under ERISA fiduciary standards and contrasts with the more cautious regulatory stance during the Biden administration. It represents a shift toward enabling broader participation in alternative assets, including crypto, which have faced concerns about complexity, volatility, custody, liquidity, and legal uncertainty.
It is important to note that the executive order does not address the regulation of digital assets themselves, only their inclusion in 401(k) plans. Direct crypto investments are not included in the expanded assets for 401(k) plans according to the executive order.
The White House has not yet specified which digital assets will be eligible for inclusion in the expanded 401(k) plans. The Truth Social Crypto Blue Chip ETF, a passive crypto ETF, is ineligible for inclusion in a 401(k) due to the nature of its investments. Passive ETFs, such as BlackRock's iBIT, would not be eligible for inclusion in a 401(k) due to the nature of the investments.
The new executive order comes as part of a series of four Presidential executive orders published by the White House yesterday. Another executive order targets banks that may have participated in de-banking based on political or religious motives or other reasons.
This move towards expanding the investment options in 401(k) plans is expected to have significant implications for the retirement savings of millions of Americans, potentially offering them the opportunity to diversify their portfolios and participate in the growing digital asset market.
The executive order signed by President Trump on August 7, 2025, targets the expansion of investment options in 401(k) plans, which includes digital assets like cryptocurrency. The whitehouse action aims to broaden the range of assets that can be included in retirement plans, also encompassing private equity, private credit, and real estate.
The U.S Department of Labor (DOL) and the Securities and Exchange Commission (SEC) have been instructed to facilitate and expand 401(k) investors' access to alternative assets, including digital currencies. This is to be achieved by reexamining and clarifying guidance under the Employee Retirement Income Security Act of 1974 (ERISA) related to plan fiduciaries' duties when offering such investment options.
The DOL has rescinded its 2022 guidance requiring fiduciaries to exercise "extreme care" regarding crypto in 401(k) plans, replacing it with a “facts and circumstances” standard. This means that fiduciaries must prudently evaluate crypto and other alternative investments just like any other investment, rather than imposing per se restrictions.
Expanding investment choices for the over 90 million Americans with employer-sponsored defined contribution plans is the primary goal of the executive order. This expected diversification could lead to potentially higher risk-adjusted returns for retirement savings, similar to options available to wealthier investors or public retirement plans, thus bridging gaps within the finance and business industry using technology-driven solutions.
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