Finance Expert Insights on Donald Trump's Plans for Digital Financial Innovation
The US government has unveiled a strategy for modernizing financial technology and digital assets, as outlined in the Treasury's report "Strengthening American Leadership in Digital Financial Technology." This strategy aims to foster innovation, provide regulatory clarity, and ensure secure adoption of blockchain and digital assets across the economy.
President Biden signed an executive order in 2022, directing the government to develop a framework for digital assets and financial technologies. The Treasury's report, released in July, serves as a roadmap for federal agencies with innovation implications for banks.
Key elements of the strategy include enabling lawful use and ownership of digital assets, promoting the US dollar's dominance through stablecoin adoption, modernizing bank regulatory frameworks to support crypto activities, and enhancing law enforcement's ability to combat illicit use without hindering lawful activities.
The strategy calls for a comprehensive government-wide regulatory reform approach that provides clear guidance and regulatory certainty to entrepreneurs, developers, and market participants in digital assets and blockchain technologies. The Treasury also encourages US digital asset markets to become the world's most liquid and competitive by encouraging innovation and market depth.
To achieve this, the Treasury is urging greater US engagement in international standard-setting bodies and greater coordination across agencies. The report also calls for the development of an economic function-based taxonomy for digital assets to replace the previous enforcement-heavy and uneven regulatory approach.
The Treasury's report marks the beginning of a more coordinated, intentional strategy to modernize the financial system, protect consumers, and promote American leadership in a rapidly changing global landscape. However, the message for banks is clear: future success will depend not just on internal innovation, but on strategic alignment with public policy goals and infrastructure initiatives.
The report also emphasizes the importance of a trusted, interoperable digital identity system, an often overlooked barrier to financial innovation in the US. Banks must accelerate the adoption of real-time payments, increase investment in and deployment of secure API frameworks, support the development of a digital identity infrastructure, and reevaluate their data governance policies and practices.
According to Cornerstone Advisors, as of 2025, only about 45% of banks and 38% of credit unions offered real-time (or faster) payments, with many only receiving, not initiating, instant payments. The Treasury is urging banks to take proactive steps to align with the emerging digital finance agenda.
The US has taken a market-led approach to data access, but tensions over data security, user control, and liability have arisen due to poorly crafted rules from the Consumer Financial Protection Bureau (CFPB). The Treasury report calls for the development of a national strategy for data access, including support for secure, standardized APIs and policies that protect consumers while fostering competition.
Other countries have implemented formal open banking regulations with mandatory APIs, standardized data formats, and consent frameworks. The US, however, is losing ground in the global race for digital financial leadership, with China deploying digital currencies at scale and the European Union launching frameworks for instant payments, digital identity, and data portability.
The Treasury's report calls for investment in digital public infrastructure, with digital identity as a core component. Banks are encouraged to advocate for public-private collaboration on digital identity standards, support pilot programs, and explore partnerships with providers working toward scalable solutions.
Digital finance isn't simply a technology initiative, it's a business imperative, and boards should ask tough questions about how the bank is preparing for a digital-first future. The strategy formalized under President Trump’s 2025 Executive Order 14178 and coordinated by the President’s Working Group on Digital Asset Markets with multiple federal agencies, aims to position the US at the forefront of digital financial technology innovation while ensuring secure and responsible growth.
- The Treasury's report underlines the importance of digital id for financial innovation in the US, urging banks to accelerate the adoption of real-time payments and secure API frameworks, support the development of a digital identity infrastructure, and reevaluate their data governance policies and practices.
- The strategy for modernizing digital finance, as outlined in the Treasury's report, aims to position the US at the forefront of digital financial technology innovation, with key elements including enabling lawful use and ownership of digital assets, promoting the US dollar's dominance, modernizing bank regulatory frameworks, and enhancing law enforcement's ability to combat illicit use without hindering lawful activities.
