Author: Terry, Blockchain in Plain Language
If four years ago someone told you that in the current round of the U.S. presidential election, the candidates from both parties would actively promote their recognition and support for the crypto industry, even to the point of “showing off,” would you believe it? You would probably think that person was crazy.
However, reality can be quite dramatic. For the crypto industry, the 2024 U.S. presidential election has become a stage completely different from the 2020 and 2016 elections – unprecedentedly involving cryptocurrencies in both the overall election cycle’s agenda setting and the public statements of the presidential candidates, with both candidates even “showing off” their open attitudes.
This article will briefly explore the underlying currents behind this significant change, questioning whether the U.S.’s cryptocurrency policy is truly shifting course in 2024. What does the shift in attitudes of many political figures and regulators in 2024 signify? What impact will it have on the crypto and Web3 industries?
01
Trump and Biden’s “Cryptocurrency Battle”
While the first televised debate of the 2024 U.S. presidential election has not yet begun, Trump and Biden have already engaged in a war of words on many issues, with their open attitudes towards cryptocurrencies being a key battleground.
Initially, Trump, who was in office five years ago, publicly stated that he “didn’t like Bitcoin and other cryptocurrencies because they are not money, their value fluctuates greatly, and they have no tangible basis.” However, as a rare heavyweight political figure who has released several NFT series consecutively, Trump is now qualified to boast about his strong support for cryptocurrencies.
Especially as the election heats up, Trump increasingly positions himself as a “crypto-friendly” candidate, claiming to be a supporter of financial technology innovation. On May 22, he even opened a cryptocurrency donation website, officially accepting crypto donations – in addition to Bitcoin and Ethereum, he also supports USDC, SOL, XRP, DOGE, ZRX, SHIB, and other cryptocurrencies.
He has even frequently made public statements to showcase his inclusivity towards cryptocurrencies, leading the “crypto army” to “victory on November 5 (Election Day)” and similar messages.
In contrast, Biden, who has always demonstrated a strict regulatory attitude, seems to have loosened his stance significantly due to concerns about the election. He is trying to attract support from young voters – after all, minority groups and young people were crucial Democratic voting blocs for Biden’s victory in the 2020 election, and they have the highest acceptance of cryptocurrencies among all generations and ethnic groups.
In six key swing states, over 20% of voters consider cryptocurrencies to be an important issue. Another national survey of registered voters commissioned by the crypto company Paradigm found that cryptocurrency ownership is higher among minority communities and young people.
Therefore, according to The Washington Post, since Biden’s re-election campaign team has faced difficulties in attracting Generation Z voters, they are now recruiting a “meme manager” to manage internet content and memes (including memes).
In addition, U.S. presidential candidate Robert Kennedy, the nephew of former President John F. Kennedy, is also a staunch supporter of cryptocurrencies. He stated, “Cryptocurrencies are our way out of dependence on the Federal Reserve, the best way to combat inflation. It deprives the government and the monopolistic banking system of control, the latter transferring wealth to billionaire oligarchs by printing money, while plunging ordinary Americans into poverty. If you agree that Crypto equals freedom, please help me advance this vision as president.”
Overall, the election year is definitely a key factor. For the U.S., the group of people who directly or indirectly hold crypto assets has become an undeniable force, especially when polling data is tight, this “key minority” becomes a hot commodity, as evidenced by the passage of the FIT21 bill at this time.
02
From the FIT21 Bill to Softening Regulatory Attitudes
Whether it’s Trump’s proactive stance or Biden’s timely shift, it’s essentially to attract votes from the crypto community. Just like how both of them have opened accounts on TikTok for campaign promotion, their open attitudes towards crypto assets in the 2024 context seem more like a tactic, while the loosening on the executive, legislative, and regulatory fronts is what deserves closer attention.
It’s worth noting that on May 22, the “21st Century Financial Innovation and Technology Act” (FIT21 bill) passed the House of Representatives with an overwhelming vote of 279 to 136. This bill establishes a regulatory framework for digital assets and is seen as one of the most far-reaching laws affecting the crypto industry at present.
The core point of this bill regarding crypto regulation is the allocation of regulatory authority. This bill clearly defines two agencies responsible for regulating crypto assets: the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). If a crypto asset is defined as a commodity, it falls under CFTC regulation, while if it’s defined as a security, it falls under SEC regulation.
The specific determination of whether a crypto asset is a commodity or security can be further subdivided into factors such as the “investment contract (The Howey Test),” “use and consumption,” “decentralization,” “function and technical characteristics,” and “market activity.”
This means that a clear set of regulatory rules for various crypto projects has been established, progressing significantly from the previous state of uncertainty where the SEC wielded its authority arbitrarily – after all, compared to the SEC’s frequent enforcement actions in the crypto field, the CFTC is relatively more moderate.
Moreover, with the news of an Ethereum spot ETF surfacing, the softening of regulatory attitudes, especially from the SEC, is quite evident. During the same period, the SEC’s Trading and Markets Division called trading platforms, informing them that they would approve 19b-4 this week, and then promptly did so, almost making a 180-degree turn.
Of course, this political shift is heavily laden with political implications. In simple terms, the Democratic Party urgently needs young people to vote, and from a campaign perspective, Biden’s main positioning is to present himself as a “far-sighted octogenarian.”
However, only when the FIT21 bill is finalized will it be the most relevant piece of information to follow. Although the bill has not yet been matched by a corresponding bill in the Senate, it will not become law. Although it’s a step forward, the road ahead is still long.
Regardless, loosening at the executive and legislative levels will always prompt a shift in the regulatory landscape. Regardless of the actual outcome, this is a turning point for crypto assets to further enter the mainstream spotlight and gain a legal and regulatory framework.
03
Behind the Variables, the Rising Influence of the Crypto Community
The underlying currents behind all these variables are accelerating towards the forefront. On one hand, the increasingly massive crypto user base is becoming increasingly undeniable in terms of the importance of elections. Just like the recent market discussion about “50 million Americans holding crypto assets,” it is essentially a visible product of the increasing attention to crypto assets and holders in the U.S. amid the backdrop of the upcoming 2024 presidential election.
While it cannot be ruled out that this is just election-year data to soften the stance of presidential candidates and attract crypto voters, it also indirectly indicates that more and more politicians and candidates are starting to “appease” this segment of voters.
On the other hand, the lobbying and influence of the crypto industry are also delving deeper into the realm of policy-making. According to data from OpenSecrets, which tracks political donations, the lobbying spending by the crypto industry reached a record high of $24.7 million in 2023, followed by $5.6 million in the first quarter of 2024.
Underneath the surface, the number of U.S. congressmen accepting political donations from cryptocurrency-related teams is visibly increasing, as they begin to stand on the side of the crypto industry to defend common interests. For example, on May 8, 21 House Democrats voted to support a resolution against an SEC announcement, and on May 16, 11 Senate Democrats also voted in favor of the resolution. According to an analysis by OpenSecrets, many of these congressmen are major recipients of political donations from the crypto industry.
04
Conclusion
Dialectically speaking, this round of elections has become a clear watershed for the development of Web3 and the crypto industry, especially since Crypto had almost no influence or presence in the 2020 and 2016 election processes.
However, now, Web3 and the crypto industry are showing their undeniable power in the current election, demonstrating a completely different level of importance in terms of its impact on voter awareness, as well as the role it plays in campaign strategy and funding flows.
Starting from humble beginnings, after the dust settles on the 2024 U.S. election, Web3 and the crypto industry may truly enter a new era.
