President Donald Trump issued a debanking executive order this week aimed at stopping what his administration described as unfair banking discrimination toward the crypto sector.

Will the order be the definitive blow to the so-called Operation Choke Point 2.0? Will banks that debanked crypto companies unfairly be forced to reinstate them? Custodia Bank founder and CEO Caitlin Long dives into the finer points of the order:

Debanking executive order installs independent overseer

The first “hidden gem,” according to Long, is that Trump’s debanking executive order installs an independent overseer, highlighting the administration’s reservations with the existing three federal banking regulators, the FDIC, the Federal Reserve (Fed), and the Office of the Comptroller of the Currency (OCC).

Instead, it places the Small Business Administration (SBA), a non-bank regulator, as an independent overseer above these agencies to monitor debanking issues. This looks an awful lot like a lack of faith in existing agencies’ willingness or ability to address political and unfair debanking practices.

The SBA’s leader is a long-time Bitcoiner, Kelly Loeffler

President Trump picked Kelly Loeffler, a former senator, business executive, and known supporter of Bitcoin and the broader crypto industry, to lead the SBA. This appointment speaks volumes in the crypto community, as Loeffler was the CEO of Bakkt, an institutional bitcoin futures platform, before her Senate career.

The decision to place her in charge of monitoring debanking is an indication that this administration is serious about reform and that its trust in the previous regulatory agencies is low.

Political leanings inside the banking agencies

Long highlights the political leanings of staff at agencies like the Fed and FDIC. According to contribution records, a large majority of donations from Fed and FDIC staff went to Democratic candidates in recent elections, with Long placing the figure as high as 92% for Democrats in 2024.

This raises concerns for some that regulatory actions may have been driven by partisan biases, especially given the history of crypto-related “debanking” during the Biden administration.

Definition and scope of ‘politicized or unlawful debanking’

Trump’s debanking executive order defines “politicized/unlawful debanking” broadly, focusing on “lawful business activities” rather than naming crypto or any specific sector. This language means banks can no longer refuse service simply because a business is a crypto firm if it is otherwise in compliance. The order targets not just crypto companies, but any lawful firms that may face political discrimination. As Long points out:

“Banks that refused to serve or debanked lawful crypto companies are on the hook.”

The litmus test: Custodia and other crypto banks

Custodia Bank previously faced debanking after regulators pressured multiple banks to cut ties due to their crypto business, even though the bank had a clean compliance record.

Long asserts that the true test of Trump’s debanking executive order will be whether banks that debanked Custodia (and similar crypto firms) are compelled to reinstate them. The order’s success, then, will be measured by real outcomes in banking access for crypto companies.

“If they reinstate us, then the EO succeeded”

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President Donald Trump signed an order on Aug. 7 allowing crypto in 401(k) plans, subject to agency rulemaking.

The directive tells the Labor Department, the SEC, and Treasury to revisit constraints on plan menus, opening the door for defined contribution plans to add sleeves tied to Bitcoin and ether through pooled vehicles.

The focus now is on the size of the default crypto allocations and the number of plans that implement them, since those factors will determine actual investment flows more than the policy announcement itself.

According to the Investment Company Institute, defined contribution (DC) assets stood at $12.2 trillion on March 31, with $8.7 trillion in 401(k)s. That base means even a 0.10% default inside qualified default investment alternatives, such as target date funds or collective investment trusts, would theoretically amount to $12.2 billion if adopted across the DC universe.

A quarter of plans deploying a 0.25% sleeve would equate to roughly $7.6 billion in structural bids sourced from payroll contributions and employer matches. The size of these modeled flows turns on two levers that plan sponsors control, the default percentage and the share of plans that implement it.

The policy context matters for fiduciaries. On May 28, the Labor Department rescinded its 2022 crypto compliance release that had warned fiduciaries to exercise “extreme care,” removing a key chill around menu design, per the agency’s release. The new order layers on top, instructing staff to craft avenues for access within ERISA rules.

As PLANADVISER reported, the work now shifts to guidance and product plumbing, including how DC plans can hold crypto via regulated wrappers and how recordkeepers map those positions in plan portals.

Distribution will run through defaults, where most dollars live. Target date funds dominate participant flows and house the qualified default for many plans. As MarketWatch reported last month, large managers have already begun adding private-market sleeves to new TDF designs.

That same structure can host a small crypto sleeve inside a diversified glide path, and the paycheck cadence turns that sleeve into a steady primary-market bid for the underlying ETFs that hold spot Bitcoin or Ethereum. The result goes beyond a single surge toward a programmatic flow that arrives on payroll cycles and rebalancing dates.

How much could 401(k)s bring to crypto?

The glide path math frames realistic ranges for 2026. Using ICI’s DC base, a 0.10% default across 10% of assets points to about $1.22 billion of crypto demand. A 0.50% default across 25% of assets points to about $15.3 billion, while a 1.00% default across half the market would reach about $61 billion.

Modeled flows using $12.2T US defined-contribution base; values are theoretical and illustrative.

If sponsors weight sleeves toward Bitcoin at launch, Ethereum still absorbs a measurable share once ETH ETFs are included on platforms, though the split depends on investment policy statements and recordkeeper support. These figures are mechanical translations of defaults and adoption into dollars, not forecasts of market impact.

Risk controls and fees remain core to the debate. Per The Washington Post, proponents view more menu choice as portfolio diversification, while critics warn that valuation, liquidity and costs require careful design for a retirement context. Kiplinger’s overview adds that sponsors may route exposure through managed accounts or TDFs rather than stand-alone options, a choice that centralizes due diligence and participant communication.

For crypto markets, the mechanism matters. If plans fund sleeves through spot ETFs, new contributions translate to primary creations when shares exceed inventory, which feeds through to underlying coin demand via authorized participants.

That transmission channel ties adoption inside DC plans to the ETF primary market rather than secondary swings, which is why the default percentage embedded in TDFs and CITs will matter more than menu headlines.

The next milestones sit with agency guidance, product filings, and recordkeeper integrations, then plan committee updates to investment policy statements. The flows, if implemented, would arrive on a schedule, and the order moves the 401(k) discussion from permissions to allocation math.

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US President Donald Trump is preparing to sign an executive order this Thursday that could shake up how Americans invest for retirement. The move would allow 401(k) plans to include a wider range of assets — like private equity, real estate, and yes, even cryptocurrency.

The order, as reported by Bloomberg News, tells the Labor Department to take another look at the current rules under ERISA — that’s the Employee Retirement Income Security Act — and figure out how to give retirement plan administrators more room to include less traditional, higher-risk investments.

Trump: Rewriting The Playbook

Labor Secretary Lori Chavez-DeRemer has been tasked with working alongside the Treasury, the Securities and Exchange Commission, and other federal agencies to make this happen. The main goal? Give plan sponsors a clearer roadmap to offer more diverse investment options, without falling foul of the law.

Donald Trump will sign an executive order that aims to allow private equity, real estate, cryptocurrency and other alternative assets in 401(k)s https://t.co/IXetIBnTzL

— Bloomberg (@business) August 7, 2025

Right now, most of the $12 trillion sitting in 401(k)s is invested in good old-fashioned stocks and bonds. But with this new push, savers might soon get the option to invest in assets that were once out of reach.

That said, it’s not as simple as just adding a few new buttons on a retirement dashboard. Offering private equity or crypto means plan administrators will have to show that they’ve done their homework — that the managers are qualified, the fees are fair, and that everything lines up with fiduciary standards.

BTCUSD trading at $116,349 on the 24-hour chart: TradingView

Winners And Warnings

Supporters of the move argue that expanding into private markets could lead to better long-term returns, especially in times when public markets are lagging. Critics, however, worry about the downsides — like high fees, limited access to funds, and the risks that come with less liquid investments.

Big players like Blackstone, Apollo, and KKR could benefit big-time from the change. In fact, BlackRock is already planning to roll out a new 401(k) fund with private investments in 2026. Empower Retirement is expected to launch similar offerings later this year.

Crypto Takes A Step In

What really stands out in this executive order is its nod to crypto. It’s the latest in a series of moves that show Trump warming up to digital assets. Just this past summer, the White House hosted “Crypto Week,” discussed new rules for stablecoins, and even floated the idea of a national Bitcoin reserve.

The new order reportedly asks the SEC to loosen restrictions that have kept crypto out of most retirement plans. If successful, this could open the door for Bitcoin, stablecoins, and other digital assets to become part of Americans’ retirement portfolios.

Featured image from The Traveller Mindset, chart from TradingView

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President Donald Trump signed an executive order on Aug. 7 to halt what his administration called discriminatory banking practices against the crypto industry.

The order bars federal regulators from using “reputational risk” as justification to influence banks’ decisions about working with legal businesses.

According to the administration, the digital asset sector has been disproportionately affected by behind-the-scenes pressure from regulatory agencies, leading to abrupt account closures, payroll disruptions, and loss of financial access for law-abiding firms.

The move directly targets what critics have dubbed “Operation Choke Point 2.0,” a term used by the crypto industry to describe a coordinated campaign of informal regulatory pressure.

While not an official program, the term refers to a pattern of supervisory actions that allegedly discourage banks from servicing digital asset companies, even when those firms comply with existing laws.

The modern-day chokepoint mirrors tactics once used in a 2010s-era Department of Justice initiative, which sought to cut off banking access for industries labeled high-risk for fraud, including firearms and payday lending.

However, unlike its predecessor, the newer iteration has focused largely on crypto. Since early 2023, multiple firms have reported unexplained debanking, often following vague concerns about risk rather than concrete compliance violations.

Industry advocates and pro-crypto lawmakers have stated that the unfriendly environment created uncertainty for startups and institutional players alike, limiting growth and undermining regulatory credibility in the US.

Trump’s order codifies recent moves by the Federal Reserve, FDIC, and Office of the Comptroller of the Currency, all of which have pledged to stop evaluating banks based on reputational factors.

It also aligns with legislation under discussion in Congress, where lawmakers have pushed for stricter limits on how regulators supervise politically sensitive or emerging industries.

The order is part of a broader effort by the Trump administration to establish clearer protections for crypto companies operating within the US financial system.

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