Cryptocurrency is an important topic in the 2024 presidential election, influencing political financing and voter priorities.
The influence and importance of cryptocurrencies in US elections has gained momentum in recent years, ushering in a new era in political funding and voter priorities.
In the 2024 presidential election, cryptocurrency is not just a fringe issue, but one of the central topics of political discourse. This trend is reflected in both the Democratic and Republican parties, where candidates have been actively advocating for cryptocurrency-related regulations and policies. President Biden signed an executive order to create a regulatory framework for digital assets, demonstrating bipartisan interest in the cryptocurrency market.
Public interest in the cryptocurrency sector has also surged due to the influence of economic factors such as inflation. A Grayscale survey found that 73% of voters believe presidential candidates should have knowledgeable perspectives on emerging technologies such as AI and cryptocurrency.
46% of voters are waiting for further cryptocurrency policy before investing, highlighting the desire for regulatory clarity.
The survey also found that half of young voters who own cryptocurrency are considering a candidate’s stance on digital assets, suggesting this will influence their voting decision.
Moreover, millennials in particular believe that cryptocurrencies will be part of their future portfolio.
The Dark Waters of Cryptocurrency in Political Campaigns
The role of cryptocurrency in the 2024 presidential election is expected to become important enough to influence not only voter interest but also campaign donations.
Major players in the cryptocurrency market such as Coinbase, Circle, and Andreessen Horowitz have donated a total of close to $80 million to Fairshake, a federal super PAC that advocates for cryptocurrency leadership.
According to the Financial Times, Coinbase alone plans to spend about $4 million on lobbying in 2023, while Circle plans to invest $760,000 starting in 2021.
The involvement of these major cryptocurrency companies in political financing is a demonstration of their financial power and adaptation to the changing regulatory environment.
Issues faced by cryptocurrency companies such as Binance and FTX have led regulators to take a more cautious approach to the cryptocurrency industry.
In response, these cryptocurrency companies are opening their wallets to support candidates who are likely to support cryptocurrency-friendly regulations.
However, not all reactions to the growing influence of cryptocurrencies in politics have been positive. There are concerns about potential misuse, such as money laundering, and there is a need for updates to cryptocurrency regulation similar to traditional banks.
These concerns have been echoed by lawmakers such as Senator Elizabeth Warren, who sees cryptocurrencies as a potential threat to national security and a hub for criminal activity.
Cryptocurrencies’ unique features, such as relative anonymity and ease of transfer, make them a potentially attractive option for discreet and unethical political donations.
One such example is that of FTX founder Sam Bankman-Fried, who has become one of the largest donors in the 2022 US election.
Bankman-Fried has donated more than $37 million to political campaigns, leading to speculation about the transparency and source of these funds.
FTX’s subsequent legal troubles and bankruptcy intensified the controversy, casting a shadow over the legitimacy of these contributions.
How each state handles cryptocurrency donations
The legal landscape for cryptocurrency donations varies greatly from state to state, adding another layer of complexity to the problem.
States such as California, Colorado, Iowa, Ohio, Tennessee, and Washington allow cryptocurrency donations, but their approaches vary.
For example, Washington state treats cryptocurrency donations the same as cash donations, up to a $100 limit, while Arizona treats them similarly to traditional donations. These changes in state law create complexity in the legal navigation of cryptocurrency donations.
The Federal Election Commission (FEC) has provided guidance on reporting these donations, but most states still find it in a gray area, with only a few states, such as Michigan, North Carolina, and Oregon, explicitly prohibiting it.
Recent developments have added a new dimension to the influence of cryptocurrencies in American politics. According to a CNBC report, the Cedar Innovation Foundation, a non-profit with significant support from the cryptocurrency industry, has begun actively advertising to prominent lawmakers and recruited a team of strategists to strengthen its influence.
In particular, the Cedar Innovation Foundation has been involved in significant lobbying activities, spending more than $27,000 on advertising targeting industry critics such as Senators Elizabeth Warren and Roger Marshall.
The secretive nature of the organization, which does not disclose its donors, adds to concerns about the transparency and potential for misuse in the realm of crypto political donations.
What makes the situation even more difficult is the difficulty in tracking these contributions.
For example, platforms like BitPay facilitate cryptocurrency contributions but do not fully understand the transaction process.
An investigation by the Center for Public Integrity in 2018 revealed a diverse group of 20 political candidates running for various offices who sought or received funding through cryptocurrencies.
At least three of these candidates were from states that later banned such donations.
Presidential candidates’ positions on cryptocurrency
As the 2024 U.S. presidential election approaches, candidates’ positions on cryptocurrencies are becoming increasingly important.
This is especially true as Bitcoin and other digital assets become more integrated with traditional financial systems. A clear indicator of this trend is the SEC’s approval of 11 spot Bitcoin ETFs.
Among notable figures, Republican congressman Ron DeSantis has shown a strong anti-central bank digital currency (CBDC) stance.
He proposed allowing businesses in Florida to pay state fees with cryptocurrencies and has the state pass a bill banning the use of federal CBDCs as currency.
DeSantis has also expressed his intention to ban CBDCs at the national level if elected president, seeing them as a tool to consolidate power from individuals to central authorities.
In the Democratic Party, Robert F. Kennedy Jr. has emerged as a cryptocurrency advocate. He acknowledged cryptocurrencies, especially Bitcoin, as a major innovation engine.
Kennedy has been vocal about his belief that the U.S. government should not interfere with the cryptocurrency industry and has opposed Biden’s proposed tax on cryptocurrency mining.
the way forward
The role of cryptocurrencies in the 2024 elections boils down to a few key points.
First, the candidate can be expected to provide more clarity on cryptocurrency policy. This is not just a matter of avoiding ambiguity. This acknowledges the growing interest of voters, especially young people.
Second, there will be expanded scrutiny of how campaigns address the complexities of cryptocurrency donations, given the varying regulations across states. It is expected to be a legal maze of sorts.
Following the recent controversy, there may be a lot of scrutiny about where the money comes from and how it is used.
Finally, against the backdrop of prominent economic discourse, we will take a closer look at the candidates’ perspectives on cryptocurrencies as either part of the solution or part of the problem.
In short, this year’s presidential election could be a test of how politics adapts to new financial realities.