The Trump administration is signaling a pivotal shift in U.S. financial policy, with plans to deeply integrate digital assets into the nation’s retirement system and everyday commerce. Two major proposals are taking center stage: one that could allow 401(k) retirement funds to invest in cryptocurrencies, and another that would eliminate capital gains taxes on small Bitcoin transactions.
This dual-pronged approach aims to position the U.S. as a leader in digital finance, potentially unlocking trillions in capital and removing significant friction for mainstream crypto adoption.
Unlocking Retirement Savings for Digital Assets
At the heart of the proposal is a plan to potentially issue an executive order that would direct regulators to greenlight cryptocurrencies, alongside other alternative assets like gold and private equity, as permissible investments for 401(k) plans.
Traditionally, these tax-advantaged retirement accounts, which hold an estimated $9 trillion in assets, have been restricted to conventional investments like stocks and bonds. Opening them up to crypto would represent a monumental change, offering millions of Americans direct or indirect exposure to the digital asset market through their primary long-term savings vehicle.
The potential for capital inflow has not gone unnoticed by industry leaders. Omar Kanji, a partner at crypto venture firm Dragonfly, described the development as the “biggest unlock” for the sector.
“US retirement assets sit at $43 trillion, with $9 trillion in 401ks. With Trump opening the floodgates, if crypto sees just a 1% allocation from 401ks, that’s ~$90B in fresh inflows. The retirement market is enormous, and the real party is about to get started.”
Making Bitcoin Practical for Daily Use
Beyond long-term savings, the administration is also looking to simplify the daily use of crypto by introducing a “de minimis” tax exemption for small transactions.
Currently, every crypto purchase, no matter how small, is a taxable event in the U.S., creating a significant accounting headache and discouraging people from using Bitcoin to buy a cup of coffee. The proposed policy would eliminate capital gains taxes on minor crypto payments, likely mirroring an existing rule that exempts foreign currency gains under $200.
White House Press Secretary Karoline Leavitt has confirmed that this policy is under active consideration.
This change could be a game-changer for crypto’s utility. Caitlin Long, CEO of Custodia Bank, emphasized its importance, suggesting it could have a greater practical impact than even recent pro-crypto legislation. By removing the tax burden from small purchases, the policy could finally pave the way for Bitcoin to evolve from a purely speculative investment into a functional medium of exchange for everyday Americans.
