Shortly after taking office on January 20, 2025, President Trump issued an executive order outlining his Administration’s intent to “support the responsible growth and use of digital assets, blockchain technology, non-fungible tokens, and related technologies across all sectors of the economy” and “secure America’s position as the world’s leader in the digital asset economy”—a sharp contrast to the Biden Administration’s more cautious approach. Cryptocurrency has remained a major focus for the Trump Administration in its first year, with President Trump signing the “GENIUS Act” into law (regulating “stablecoins”) and issuing additional EOs directing the creation of a “United States Digital Asset Stockpile” and “democratizing access” to alternative and digital assets in 401(k) plans. This article focuses on describing the Administration’s position on digital assets, explaining how plan sponsors should approach the topic from a compliance perspective, and predicting what comes next. In general, we expect interest in digital assets to increase and recommend that sponsors exercise the same prudence and thoughtful process when considering digital asset investment vehicles as they would in evaluating any potential investment, while also considering the aspects of digital assets that make them unique in the investment space.
The U.S. Department of Labor has historically articulated a neutral, context-specific approach to evaluating investment types and strategies. The Biden Administration’s DOL modified this neutral approach in 2022 and cautioned plan fiduciaries to exercise extreme care before adding a cryptocurrency option to a 401(k) plan’s investment menu. On May 28, 2025, in response to President Trump’s January 23 EO, the DOL rescinded the Biden-era Release and reverted to the DOL’s neutral approach, which neither endorses nor disapproves the inclusion of cryptocurrency in plan menus. The DOL has noted that it is working toward issuing proposed regulations but specific guidance on digital asset investments remains pending as of the date of this article.
A return to the neutral, context-specific approach to investment evaluations means that plan fiduciaries must act as “prudent experts” and give “appropriate consideration” to the facts and circumstances relevant to the investment. Notably, neither the EO nor the DOL’s subsequent actions purport to alter the substantive requirements under ERISA, and in fact reaffirmed that retirement plan fiduciaries are held to high standards. “Appropriate consideration” of a given investment strategy generally includes a determination that the particular investment is reasonably designed to further the purposes of the plan, after evaluating factors such as the risks of loss and opportunities for gain, portfolio composition, liquidity, diversification, valuation, projected returns, manager capabilities, and indicia of ownership. Information about the volatility and risk and return profiles of popular cryptocurrency (like Bitcoin or Ethereum) may be readily available, while newer coins may have little to no information at hand. Defined benefit plan fiduciaries may have different considerations than defined contribution plan fiduciaries, and the ERISA 404(c) safe harbor plays a key role for defined contribution plans, as many digital assets are offered through IRAs or crypto ETFs rather than as designated plan options.
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