From critiques to assurances to safeguard Bitcoin: the subject and rationale behind US policymakers’ discussions on cryptocurrencies.
Certain American lawmakers actively scrutinize the crypto sector, while others ardently champion Bitcoin. Analysts, on the other hand, identify the forthcoming US presidential election as one of the key influencers of the cryptocurrency market in 2024.
Before the race for the presidency inundated the media landscape, ForkLog investigated the rhetoric of American policymakers concerning digital assets and the rationale behind their stances.
Detractors of the crypto sector
Back in 2016, when Bitcoin’s ATH was below $1,000, former US President Barack Obama likened the pioneering cryptocurrency to “a Swiss bank in your pocket.” Despite enumerating the technology’s deficiencies, he underscored its revolutionary potential.
“If it’s technically feasible to create an impenetrable device or system with encryption so robust that there’s no key or backdoor whatsoever, then how do we prevent a distributor of child pornography? How do we identify a terrorist operator?” Obama queried.
According to him, if the government cannot “crack Bitcoin,” then it cannot ensure “even such a basic function as tax oversight.”
In 2021, former Secretary of State and 2016 US presidential contender Hillary Clinton voiced concerns over the ascent of the crypto market due to its capacity to “erode the dollar’s status as the world’s reserve currency.” In 2023, incumbent US President Joe Biden accused House Republicans aligned with Donald Trump of being disinclined to close “tax loopholes benefiting affluent crypto investors.”
“A crypto investor, unlike a shareholder or bondholder, can divest digital assets at a loss to mitigate tax obligations and subsequently repurchase the same cryptocurrency the very next day,” Biden’s 2024 fiscal blueprint asserted.
During the same year, the presidential administration issued a report highlighting the hazards posed by digital assets to citizens and financial stability within the nation.
“Cryptocurrencies do not serve as a viable substitute for fiat; rather, their innovations primarily revolve around fabricating artificial scarcity to sustain prices. Many lack intrinsic value. This raises concerns regarding the necessity of regulation to shield consumers, investors, and the broader financial system from digital asset-induced panics, crashes, and deception,” the document delineates.
Supporters of cryptocurrency
In May 2023, US presidential contenders Robert Francis Kennedy Jr. and Vivek Ramaswamy commenced accepting Bitcoin as campaign contributions.
Kennedy Jr. advocated for digital gold and censured the SEC and FDIC for their “campaign against cryptocurrencies,” which he claimed precipitated the banking crisis in the nation. The nephew of the 35th US President also voiced opposition to CBDC. If elected, he pledged to back the national currency with Bitcoin and exempt income from Bitcoin transactions from taxation. Over the summer, Kennedy Jr. also revealed his purchase of 14 BTC for his children. His stance garnered support from the CEO of Block and Twitter’s founder, Jack Dorsey.
Florida Governor and Republican presidential hopeful Ron DeSantis vowed to safeguard Bitcoin and criticized CBDC, a sentiment echoed by Vivek Ramaswamy, who branded it a “serious threat to freedom of expression.” Ramaswamy also rebuked the SEC and cryptocurrency regulation.
Former US President Donald Trump also took a stance against CBDC, adamantly declaring he would never sanction the Fed to roll out a digital dollar, citing concerns over the technology’s potential for “debanking and political manipulation.”
“As your president, I will adamantly oppose the introduction of a CBDC. Such an asset would grant the federal government unprecedented control over your finances. This poses a grave threat to freedom — I will not permit this in the United States,” he asserted.
Trump asserted that the evolving landscape of Bitcoin will necessitate tailored regulation, given that the pioneering cryptocurrency has already “taken on a life of its own.”
“There’s a growing number of individuals using it. It’s intriguing to see more and more people interested in transacting with Bitcoin. Some degree of regulation will likely be necessary. However, I believe it could coexist alongside existing structures,” the former president remarked.
However, Trump currently remains hesitant to endorse Bitcoin as a medium of exchange in the United States, emphasizing his longstanding preference for the dollar.
Entire cohorts of American lawmakers oppose the digital dollar. In February 2024, five US senators introduced the Anti-CBDC Oversight Bill, aiming to bar the Fed from directly issuing the asset to citizens.
The bill’s sponsors include Republican senators Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Brown. They harbor concerns that a central bank digital currency would be engineered to surveil ordinary citizens by monitoring their transactions.
“The Biden administration is eager to encroach upon our liberties and intrude on citizens’ privacy by surveilling their personal spending patterns, so Congress must clarify that the Fed lacks the authority to implement a CBDC,” Cruz asserted.
In 2023, American politicians frequently rebuked SEC chief Gary Gensler, who accused the crypto industry of noncompliance with regulatory standards.
During a speech in the US House of Representatives in April, Gensler faltered to provide a clear classification of Ethereum as a security. He faced allegations of intentionally driving the crypto industry away from the country “into the clutches of the Chinese Communist Party.”
Both Republicans and Democrats voiced discontent with Gensler’s stewardship regarding digital assets. He faced criticism for his perceived lack of proactive measures to avert the collapse of FTX, learn from its aftermath, and establish clear guidelines for cryptocurrency firms.
Throughout 2023, Republicans repeatedly tabled bills seeking Gensler’s removal and the restructuring of the SEC. Such initiatives were put forth in April, June, and August.
Why is it significant?
A Grayscale report underscores that the advocacy for cryptocurrencies among US presidential contenders stems from the anticipation that Gen Z and millennials will constitute a substantial portion (approximately 44%) of voters in the 2024 election. Younger demographics exhibit diminished trust in traditional institutions and display a greater inclination toward embracing new technologies.
Grayscale emphasizes the importance of a candidate’s stance on cryptocurrencies, noting that the president not only governs the nation but also appoints heads to over 50 independent federal agencies that wield influence over various market aspects.
The report suggests that Bitcoin is poised not merely as a supplementary asset for government officials but as a matter of American national security.
Several key players in the Bitcoin market, including Coinbase, Ripple, Circle, and Kraken, have collectively allocated $78 million to bolster the Fairshake political action committee, which advocates for pro-cryptocurrency candidates for the US presidency.
Fairshake aims to leverage the transformative potential of the American crypto community to endorse leaders committed to fostering innovation and navigating responsible regulation in the digital age.
Ripple CEO Brad Garlinghouse emphasizes his company’s intent to collaborate with other industry leaders to support candidates advocating for digital asset regulation. He warns against overregulation, particularly by the SEC, which he believes is steering jurisdictions in the wrong direction while other countries capitalize on the absence of US leadership.
Chris Dixon, founder and managing director of a16z, applauds Fairshake’s dedication to electing leaders who champion thoughtful regulation, stressing the need for a balanced approach to blockchain technology’s future.
Coinbase CEO Brian Armstrong highlights the industry’s enhanced position to elect pro-crypto candidates in 2024, branding the upcoming elections as a pivotal moment for the crypto sector and its legal status.
Fairshake, according to Politico, has endorsed 13 presidential candidates and has already invested $1.2 million in television ad campaigns. These advertisements emphasize politicians’ efforts to attract future jobs and shape the next generation of the internet.
A Coinbase report reveals that 27% of California adults, roughly 8.2 million people, own digital assets. The majority of them advocate for transforming the financial system and emphasize the importance of political support for innovation. Furthermore, a significant portion of digital asset holders in California are inclined to support candidates who promote the crypto industry as a job creator and source of US geopolitical influence.
Nationally, 51% of adult Millennials and Zeters share this sentiment. The report predicts that in the 2024 elections, they will be an active minority, but by 2028, they will constitute the majority of voters.
The Crypto Council for Innovation (CCI) finds that approximately 83% of surveyed individuals prefer candidates committed to establishing clear regulations for cryptocurrencies to facilitate investor choice and industry growth.
Despite Republicans often voicing support for cryptocurrencies, initiatives against CBDC and calls for reasonable industry regulation are also echoed by Democrats. Thus, support or criticism of digital assets has not been confined to specific party lines.
Experts and analysts concur on the increasing influence of the crypto industry in US political discourse. It’s conceivable that crypto companies will persist in lobbying their interests in Washington, with the possibility of witnessing an ardent supporter of digital assets assume the American presidency someday
My name is Jay Skrantz, and I’ve been a freelance writer for 10 years, concentrating largely on investment brokerage, mutual fund investing, and financial analysis topics. As a reporter, I’ve written extensively for a wide variety of sites and publications like SeekingAlpha, MoneyShow, and MotleyFool. I’ve also done substantial freelance work for a number of financial publications, including MarketWatch, CIO Magazine, and TheStreet.
