Cryptocurrencies are a major issue in the 2024 presidential race, influencing political funding and voter priorities.
The influence and importance of cryptocurrencies in US elections have gained momentum in recent years, marking a new era in political financing and voter priorities.
For the 2024 presidential elections, cryptocurrencies are not just a fringe issue, but one of the central topics in the political discourse. This trend is reflected in both the Democratic and Republican parties, where candidates have actively supported regulations and policies related to cryptocurrencies. President Biden signed an executive order to create a regulatory framework for digital assets, illustrating bipartisan interest in the cryptocurrency market.
Public interest in the cryptocurrency sector has also increased, influenced by economic factors such as inflation. A poll conducted by Grayscale found that 73% of voters believe presidential candidates should possess a well-informed perspective on new technologies such as artificial intelligence and cryptocurrencies.
46% of voters await further cryptocurrency policy before investing, highlighting the desire for regulatory clarity.
This survey also shows that half of young voters who own cryptocurrencies are considering candidates’ positions on digital assets, suggesting this will influence voting decisions.
Additionally, Millennials, in particular, believe that cryptocurrencies will be part of their future portfolio.
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The murky waters of cryptocurrencies in political campaigns
The role of cryptocurrencies in the 2024 presidential election promises to be significant, influencing not only voter interest but also campaign donations.
Major players in the cryptocurrency market, such as Coinbase, Circle, and Andreessen Horowitz, have collectively contributed nearly $80 million to Fairshake, a federal super PAC that supports pro-crypto leadership.
According to the Financial Times, Coinbase alone will spend around $4 million on lobbying in 2023, while Circle has invested $760,000 since 2021.
The involvement of these major crypto entities in political financing is about showcasing their financial power and adapting to a changing regulatory environment.
The challenges faced by crypto companies such as Binance and FTX have led to a more cautious approach from regulators towards the cryptocurrency industry.
In response, these cryptocurrency companies are opening their wallets to support candidates who are more likely to support crypto-friendly regulations.
However, not all responses to the growing influence of cryptocurrencies in politics are positive. There are concerns about potential misuse, such as money laundering, and calls for regulatory updates on cryptocurrencies similar to traditional banking.
These concerns are echoed by lawmakers like Senator Elizabeth Warren, who sees cryptocurrencies as potential national security threats and centers of criminal activity.
Cryptocurrencies’ inherent characteristics, such as relative anonymity and ease of transfer, make them a potentially attractive option for discreet and perhaps unethical political donations.
An example is the case of Sam Bankman-Fried, the founder of FTX, who became one of the largest donors in the 2022 US elections.
Bankman-Fried has contributed more than $37 million to political campaigns, leading to speculation about the transparency and origins of these funds.
The controversy has intensified, given subsequent legal problems and the bankruptcy of FTX, casting a shadow on the legitimacy of these contributions.
How different states treat cryptocurrency donations
The legal landscape for crypto contributions varies significantly from state to state, adding another layer of complexity to the issue.
States such as California, Colorado, Iowa, Ohio, Tennessee, and Washington allow crypto contributions, but their approaches vary.
For example, Washington state treats cryptocurrency donations as equivalent to cash contributions with a limit of $100, while Arizona treats them more like traditional contributions. This variation in state laws creates complexity in the legal navigation of crypto contributions.
The Federal Election Commission (FEC) has provided guidance for reporting such donations, but most states remain in a gray area, with only a few, such as Michigan, North Carolina, and Oregon, explicitly banning them.
Recent developments have added a new dimension to the influence of cryptocurrencies in US politics. According to a report from CNBC, the Cedar Innovation Foundation, a nonprofit organization heavily supported by the cryptocurrency industry, has been actively launching ads against prominent lawmakers and has recruited a team of strategists to strengthen its influence.
In particular, the Cedar Innovation Foundation has been involved in significant lobbying efforts, spending over $27,000 on ads targeting industry critics such as Senators Elizabeth Warren and Roger Marshall.
The secretive nature of this organization, which does not disclose its donors, increases concerns about transparency and potential misuse in the field of crypto political contributions.
To make matters more difficult, tracking and tracking these contributions is fraught with challenges.
For example, platforms like BitPay facilitate crypto contributions but do not fully demystify the transaction process.
The 2018 Center for Public Integrity investigation revealed a diverse group of 20 political candidates running for various offices who sought or received cryptocurrency funding.
Among them, at least three candidates were from a state that subsequently banned such donations.
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Presidential candidates’ position on cryptocurrencies
As the 2024 US presidential election approaches, candidates’ positions on cryptocurrency are becoming increasingly important.
This is especially true as Bitcoin and other digital assets become increasingly integrated with the traditional financial system. A clear indicator of this trend is the SEC’s approval of 11 spot Bitcoin ETFs.
Among notable figures, Ron DeSantis, a Republican, has shown a strong anti-central bank digital currency (CBDC) stance.
He proposed allowing businesses in Florida to pay state taxes with cryptocurrencies and passed state laws to ban the use of a federal CBDC as money.
DeSantis has also expressed his intention to ban CBDCs nationwide if he is elected president, seeing them as tools that consolidate power from individuals to central authorities.
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On the Democratic side, Robert F. Kennedy Jr. has emerged as a supporter of cryptocurrencies. He recognized cryptocurrencies, particularly Bitcoin, as an important driver of innovation.
Kennedy has openly expressed his belief that the US government should not hinder the cryptocurrency industry and has opposed Biden’s proposal to tax cryptocurrency mining.
The road ahead
The role of cryptocurrencies in the 2024 elections boils down to a few key points.
First, candidates are expected to provide more clarity on their crypto policy. It’s not just about avoiding vagueness; recognizes the growing attention from voters, particularly the younger demographic.
Second, the examination will extend to how election campaigns address the complexities of cryptocurrency donations, given differing regulations across states. It is expected to be something of a legal maze.
After the recent controversies, there may be a lot of scrutiny over where the money comes from and how it is used.
Finally, against the backdrop of a major economic speech, candidates’ perspectives on cryptocurrencies as part of the solution or problem will be carefully observed.
In short, this year’s presidential election could test how politics adapts to new financial realities.