In a significant policy shift, President Donald Trump signed an executive order on August 7, 2025, potentially allowing private equity and cryptocurrency investments in 401 retirement plans. This move could grant the $5 trillion private equity industry and the burgeoning cryptocurrency sector access to American retirement funds, pending regulatory updates from federal agencies, particularly the Department of Labor. These changes would redefine what qualifies as an asset under ERISA rules, which govern retirement plans.
Currently, most 401 investments are in stocks, bonds, and cash-equivalents known for their relative stability. Introducing private equity and crypto, known for high returns but also significant risk and illiquidity, is a departure from past policies that prioritized safety and transparency in retirement investing. Supporters argue these new options could benefit younger, risk-tolerant savers and diversify portfolios.
The cryptocurrency sector has experienced a surge in popularity, especially following Trump's 2024 election win, with Bitcoin prices nearly doubling. Industry giants like Coinbase, which supported Trump's campaign, are expected to benefit from this policy change. However, full implementation could take years, as major retirement firms like Fidelity and Vanguard consider suitable product offerings and investor education efforts.
In related developments, Ripple announced its acquisition of Toronto-based stablecoin payments platform Rail for $200 million. This move aims to strengthen Ripple’s position in the stablecoin payments space by integrating Rail’s cross-border payment capabilities, virtual accounts, and automated back-office tools. The acquisition is expected to close in Q4 of 2025, pending regulatory approvals.
Additionally, Binance has partnered with Spain's BBVA to offer crypto investors an option to hold their assets off the exchange. BBVA, Spain’s third-largest bank, now acts as an independent custodian, enhancing investor confidence due to its established reputation. This collaboration reflects growing comfort among traditional banks with crypto, spurred by U.S. and EU legislation and pro-crypto sentiment under the Trump administration.
These developments underscore a broader trend of integrating cryptocurrency into traditional financial systems, signaling a potential shift in how digital assets are perceived and utilized within established financial frameworks.
