President Trump Issues Executive Order to Facilitate Fintech Innovation in the United States

President Donald J. Trump signed an executive order on May 19, 2026, titled “Integrating Financial Technology Innovation into Regulatory Frameworks,” directing federal financial regulators to “update regulations to allow integration of digital assets and innovative technology into traditional financial services and payment systems” and to “remove overly burdensome and fragmented regulations and supervisory practices that form barriers to entry and primarily benefit incumbent financial services firms.” The executive order is the latest in a series of executive actions aimed at cementing the United States as a global leader in fintech and digital asset innovation.

The executive order arrives as Congress nears passage of the CLARITY Act and just months after the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) issued their landmark Joint Interpretation on crypto asset classification.[1],[2] Together, these developments suggest a coordinated push to establish the United States as the jurisdiction of choice for digital asset innovation.

Key Directives

The executive order operates through two parallel mechanisms. Section 3 imposes mandatory directives on six agencies collectively defined as “Federal financial regulators,”[3] requiring them to review and update rules that impede fintech innovation. Section 4 separately requests the Federal Reserve Board, which is excluded from Section 3’s mandates, to undertake the same review and to evaluate the legal framework governing non-bank access to Reserve Bank payment accounts. Both sections target “fintech firms,” which the executive order broadly defines as any non-bank company that uses or develops technology to offer or support financial products or services, ranging from payment processing and lending to digital asset services and blockchain-based activities.

Section 3 requires each regulator to conduct, within 90 days, a comprehensive review of existing regulations, guidance, and supervisory practices to identify those that could be updated to facilitate innovation and competition, “particularly those that are small and emerging.” The reviews must identify rules that impede fintech-bank partnerships and those that could be amended to streamline application processes for bank charters, deposit insurance, and other federal authorizations. Each regulator must then take affirmative steps to encourage innovation within 180 days.

Section 4 directs the Federal Reserve to report to the President within 120 days on its legal authority to extend direct access to Reserve Bank payment accounts for non-bank financial companies, including those engaged in digital assets, along with options for expanding access and whether individual Reserve Banks have independent authority to grant or deny it. If existing law permits direct access, the Fed is asked to establish transparent application procedures and resolve complete applications within 90 days. That 90-day application timeline would mark a dramatic departure from current practice, where master account applications have languished for years. Custodia Bank’s application, for example, remained pending for over two years before being denied.

For traditional banks and credit unions, the executive order presents both opportunity and challenge. Streamlined partnership frameworks should make bank-fintech collaboration easier, but expanded Fed payment access for non-bank fintechs could introduce new competition in areas traditionally dominated by depository institutions.

As the Fact Sheet accompanying the executive order states, these measures are intended to “help cement the United States as the world leader in financial technology innovation.” Whether this vision is realized will depend on how aggressively regulators implement the executive order’s directives and whether the balance among innovation, safety and soundness, consumer protection, and financial stability is maintained.

What to Watch

The 90-Day Reviews. The regulatory reviews mandated by Section 3 will be the first concrete test of the executive order’s impact. Banks and advisers considering fintech partnerships should engage with regulators during any comment periods that follow.

The Federal Reserve’s 120-Day Report. If the Federal Reserve opens a pathway for non-bank fintechs to access Reserve Bank accounts, traditional banks will face new competition for payment services. If the report identifies insurmountable legal barriers, the administration may pivot to legislative solutions.

State-Level Risk. Federal deregulation does not equal a compliance holiday. State attorneys general and financial regulators have demonstrated willingness to fill perceived enforcement gaps, and firms operating in multiple states remain exposed to a patchwork of state requirements.

The CLARITY Act. If the CLARITY Act becomes law,[4] firms should begin assessing which digital asset activities would fall under CFTC versus SEC jurisdiction and prepare for potential registration or licensing changes.

Katten is continually monitoring the latest US financial regulatory developments, including matters concerning regulatory coordination and harmonization efforts.  For more information about the executive order and how this may impact your regulatory compliance obligations, please contact one of the authors of this article or your primary Katten attorney.