As federal agencies prepare for new executive leadership, an obscure ethics rule threatens to hamper the incoming Trump administration’s ability to develop sound digital asset policies. Legal Advisory 22-04, issued by the Office of Government Ethics in 2022, has largely flown under the radar as part of the Biden administration’s restrictive approach to crypto. Still, its impact could be profound: it effectively excludes anyone holding cryptocurrencies, tokens, or stablecoins from federal service.

For an incoming administration that promised to restore American competitiveness in financial innovation, this presents an immediate challenge. Key agencies such as the Treasury, SEC, CFTC and Federal Reserve need officials who understand both traditional finance and digital assets. But the current ethics guidance forces potential appointees and civil servants to make an impossible choice: divest from the sector altogether or stay out of public service.

The irony is striking. A finance minister can hold investments in JP Morgan while working on banking policy, but they cannot hold any amount of bitcoin while working on digital asset regulation. An SEC attorney can own mutual funds while reviewing securities cases, but they can’t hold even $100 in stablecoins. This creates an artificial barrier to recruiting experts precisely when their expertise is most needed.

As Senior Director of Industry Affairs at the Blockchain Association, I work with more than 100 member companies at the forefront of financial innovation. Many of our members include professionals with deep government experience who could contribute valuable insight to federal service. But under current rules, their expertise remains unbounded unless they’re willing to completely divest themselves of the industry they know best.

There is a straightforward solution: the Office of Government Ethics should amend its guidance to allow de minimis holdings of digital assets, similar to existing rules for traditional financial instruments. This would uphold ethical standards while opening the door to much-needed expertise. Alternatively, the incoming administration could simply lift the advisory via executive order — a quick win that would signal a more balanced approach to crypto policy.

The stakes are high. As countries like Singapore, Switzerland and the United Arab Emirates race to establish clear regulatory frameworks for digital assets, the US government needs officials who understand both the opportunities and the risks. Maintaining an overly broad ethics rule doesn’t just hamper agencies—it undermines America’s ability to lead in financial innovation.

For an incoming administration focused on effective governance and American leadership in technology, addressing this barrier should be an early, easily achievable priority. The alternative is to see crucial positions go unfilled, or worse, filled by those with limited understanding of one of the most transformative technologies of our time.