The Democratic and Republican parties have shown stark differences in their priorities, regulatory direction, and tolerance for innovation in crypto policy.
Written by: Chandler, ForesightNews
The 2024 US presidential election is in the final stretch.
According to data from NBC News, as of 2:00 AM local time on October 30, more than 50 million voters nationwide have already cast their ballots for the 2024 presidential election.
As the election campaign heats up, voter concerns are increasingly focused on the future direction of the US economy and the policy differences between the two parties. In a recent report, Morgan Stanley analysts Monica Guerra and Daniel Kohen analyzed the potential impact of the 2024 US presidential election on the markets, noting that economic signals are mixed and investor uncertainty is increasing.
Fluctuating consumer sentiment and persistently high prices are influencing voter views, while traditional market indicators cannot provide clear predictions of the election outcome.
Due to the volatility in consumer confidence and ongoing price pressures, economic signals remain complex, and the tense situation in swing states and the delayed election results further increase market volatility expectations. The differences and divisions between the two parties' policies will undoubtedly be a key point of discussion in this context.
According to Coindesk, citing a recent poll by Fairleigh Dickinson University, cryptocurrency holders are more likely to vote for Trump than Vice President Harris. Half of cryptocurrency holders said they plan to vote for Trump, while only 38% of cryptocurrency holders prefer Harris.
Among non-cryptocurrency holders, Harris leads by 12 percentage points: 53% of non-cryptocurrency voters said they will vote for Harris, while 41% plan to vote for Trump.
Grayscale's mid-year survey report also shows that over the past six months, voters have become more focused on Bit due to geopolitical tensions, inflation, and US dollar risks. Due to macroeconomic dynamics and the maturity of Bit itself, nearly half of the voters (47%) are increasingly expecting some of their portfolios to include cryptocurrencies (this proportion was 40% at the end of last year).
As in the first-phase survey this year, respondents ranked inflation as the top issue in the election (28%), further emphasizing the potential value of assets like Bit with transparent and strict supply.
In this US presidential election cycle, the political influence of the crypto industry is not only reflected in the expansion of its voter base, but also in the growing weight of its political contributions.
Data shows that as of July 2024, the crypto political action committee (super PAC) Fairshake has raised over $200 million, making it one of the largest super PACs, raising over $25 million in June alone. In August, Fairshake announced it would spend $25 million on a TV ad campaign to support 18 House candidates from both parties.
Furthermore, according to data released by the Federal Election Commission on Sunday, the crypto PAC Fairshake allocated nearly $29 million in September, making it one of the highest-spending organizations in the entire election cycle. Of this, $15 million was donated to the "Defend American Jobs PAC", which focuses on crypto and blockchain policy and supports the Republican Party; $5 million was donated to the "Protect Progress PAC", which only supports Democratic candidates.
Fairshake also donated over $1.9 million to Congressman Patrick Ryan (D-NY), over $1.7 million to Congressman Steven Horsford (D-NV), and nearly $1 million to Congresswoman Angela Dawn Craig (D-MN). The remaining funds were donated to several candidates in Illinois, Colorado, Oregon, Iowa, and Arkansas.
In this context, crypto assets, as an emerging financial and technological force, are entering the political agenda of both parties in an undeniable way, becoming one of the key factors influencing the policy positions of candidates. However, the Democratic and Republican parties have shown stark differences in their policy priorities, regulatory direction, and tolerance for innovation, which is also one of the important reasons affecting the future development of the crypto industry in this election.
The Democratic Party's Crypto Stance and Policy Orientation: Prudent Regulation
Under the Biden-led Democratic administration, the US's regulatory stance on the crypto industry has been predominantly cautious, aimed at improving regulations and maintaining market order. In March 2022, Biden signed the "Executive Order on Ensuring Responsible Development of Digital Assets", marking the first time the US government has formally proposed a strategic framework for the crypto industry.
The order instructed federal agencies to conduct a comprehensive review of the potential risks and regulatory needs of digital assets, and in September 2022, a detailed digital asset development framework was released, further clarifying the regulatory direction.
This cautious attitude is also deeply influenced by the chain reaction caused by the previous bear market and the FTX collapse. The "2023 Economic Report of the President" released in March 2023 made a harsh assessment of the value and risks of crypto assets, stating that crypto assets "have high risks and are difficult to use as a payment tool or effectively expand financial inclusion", and warned that such assets may pose ongoing risks to financial markets, investors, and consumers.
Subsequently, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have successively launched strict enforcement actions against crypto companies such as Binance, Kraken, and Coinbase, reflecting the Biden administration's high concern about industry risks and strong intention to regulate market order.
In 2024, the Democratic Party's regulatory stance on the crypto industry is gradually changing, and the party's internal stance on cryptocurrencies is no longer unified, with the radical camp led by Senator Elizabeth Warren's strict regulatory approach no longer receiving full support. Some Democratic lawmakers are gradually leaning towards a more pragmatic attitude, focusing on the negative impact of innovation constraints.
On May 16, 2024, a group of Democratic senators joined Republican senators to pass a bill to repeal SAB 121, which originally required banks holding custody of crypto assets to hold equivalent cash, imposing a significant burden on financial institutions. The repeal of SAB 121 was seen as a new trend of opposition to the SEC's over-intervention within the Democratic Party, hinting that the crypto regulatory stance is shifting from radical to neutral.
In addition, more and more Democratic lawmakers are gradually recognizing the economic and technological value of the crypto industry, especially the appeal of cryptocurrencies among young voters.
On May 23, the SEC's attitude towards spot Ether ETFs suddenly shifted, which was interpreted as a friendly signal released by the Democrats under electoral pressure. Facing Trump's public support for the crypto industry and the attraction of a large number of crypto voters, the Democrats have to re-examine their stance on crypto policy to avoid losing the support of young voters and crypto industry practitioners.
Market signals and electoral pressures have also accelerated policy adjustments. The Democrats have realized that an overly extreme cryptocurrency regulatory policy may lead to negative market reactions and undermine their support in key swing states.
On October 14, presidential candidate and Vice President Kamala Devi Harris proposed a new plan to provide loans to Black entrepreneurs and others facing financing barriers. According to Harris' campaign platform to attract Black male voters, the plan will provide 1 million loans, with up to $20,000 in forgiveness. Harris also promised to support a crypto regulatory framework and provide more investment certainty for the 20% of Black Americans who own or have owned digital assets.
In addition, California Governor Gavin Newsom is seen as an important supporter of the Democratic Party's campaign team within the party. In terms of cryptocurrency regulation, Newsom signed an executive order in May 2022 to establish a licensing framework for cryptocurrency companies in California. Although he vetoed a bill in September 2022 aimed at establishing a cryptocurrency regulatory framework,
he signed the Digital Financial Assets Act in October 2023. The act is widely regarded as a counterpart to New York's BitLicense system, indicating that California is competing with New York in cryptocurrency regulation, seeking to take a leading position in this emerging industry. Among the potential Democratic candidates, Newsom may be the leader most familiar with the cryptocurrency industry, which means he may have strong policy-making capabilities and be willing to cooperate with the cryptocurrency industry to develop national-level policies and education programs.
Overall, the Democratic Party's regulatory stance on the cryptocurrency industry has gradually shifted from radical to neutral in recent years, but overall, although there is some relaxation in regulatory policies, the Democratic Party still prioritizes traditional issues such as macroeconomic stability and social equity, and the cryptocurrency industry does not occupy a core position in its policy agenda and is not prominent in its policy priorities.
The Republican Party's Cryptocurrency Stance and Policy Orientation: Actively Committed
Trump has shown an extremely rare optimistic and friendly attitude towards the cryptocurrency field in this round of the presidential election, in order to attract more votes and economic support from the cryptocurrency field, the Trump campaign team announced that it would accept cryptocurrency donations, and said this move was to unite those "opposed to the Biden administration's control of the US financial market".
According to a report in The Wall Street Journal, the Trump campaign team raised a total of $331 million in the second quarter, with cryptocurrency donations accounting for about 1%, mostly in Bit and ETH, worth about $3 million, and about 100 people donated cryptocurrency to the Trump campaign team between May and the end of June.
In terms of specific policy support, the Republican Party expressed support for a number of pro-cryptocurrency policy measures in its official 2024 US election platform, vowing to end the "illegal and un-American crackdown" on the US cryptocurrency industry.
At the same time, Trump also appointed Ohio Senator J.D. Vance as the Republican vice presidential candidate. Vance was a venture capitalist and has publicly supported cryptocurrency on many occasions, criticizing the SEC's regulatory model, and last month he also drafted a legislative draft on reforming the way digital assets are regulated. In his annual report submitted last year, he disclosed that as of 2022, he held Bit worth $100,000 to $250,000 through Coinbase.
Trump himself also attended the 2024 Nashville Bit Conference on July 28 and gave a speech, clearly stating that if elected, he would fire the current SEC chairman Gary Gensler and significantly reform the regulatory policy on cryptocurrency, in order to get rid of the current government's suppression of the cryptocurrency industry.
Trump promised to provide more power resources to support Bit miners, ensuring that the US becomes the global center of cryptocurrency. He compared the development of Bit to the rise of the steel industry a century ago, believing that Bit will bring the US economy the same great potential and growth opportunities as the steel industry.
Trump also praised the pioneers of the cryptocurrency industry, appreciating the "builder spirit" they have embodied, and emphasized that the US should lead the future of Bit, otherwise it will be surpassed by China and other countries. In his vision, the US will become the global superpower of Bit and cryptocurrency, and the US's power and resources will support this goal.
In his speech, Trump reiterated his strong opposition to CBDC, promising to stop the CBDC project and defend citizens' self-custody rights. He believes that decentralized assets like Bit not only do not threaten the US dollar, but are also important tools for maintaining US financial sovereignty and freedom.
Trump clearly stated that after returning to the White House, he will stop the "persecution" of the cryptocurrency industry by the current government, and promote a fairer and clearer regulatory framework to provide a stable environment for the development of the cryptocurrency industry. He proposed the concept of a Bit strategic reserve, where the US would hold Bit assets as a permanent national wealth. His commitments demonstrate that he sees Bit and cryptocurrency as part of reviving the "American Dream", providing the Bit community with strong support and trust.
In addition, the Trump family has also begun to refresh its presence in the cryptocurrency field, with Trump's eldest son Donald Trump Jr. and second son Eric Trump deeply involved in and launching the cryptocurrency project World Liberty Financial (WLFI), with Trump himself serving as the "Chief Cryptocurrency Advocate" and supporting the WLFI project, although he has not commented on the specific details of the project.
There are even reports that the WLFI team plans to issue its own stablecoin, which is still under development and may take some time to launch. The team is also simultaneously developing the main project components of World Liberty Financial, including the stablecoin, to ensure these features are ready to be launched at the appropriate time.
In this round, Trump has also formed a deep connection with Musk. As an active advocate in the cryptocurrency field, Musk is known for promoting Bit payments and the use of Doge, which resonates with Trump's policy inclinations. Previously in Trump's campaign speech, he proposed to set up a "Department of Government Efficiency (D.O.G.E.)" and planned to have Musk lead the agency to conduct a comprehensive financial and performance audit of the federal government to reduce improper spending.
Musk expressed his support for this and promised to serve without compensation. The acronym of this agency cleverly echoes the name of Doge, this kind of pun that involves both politics and cryptocurrency makes their tendencies in the cryptocurrency field self-evident.
The US Election and the Future Direction of Cryptocurrency Policy
In summary, the deep divide between the two parties in the US on cryptocurrency asset policy profoundly affects the future of this industry. The Democratic Party's policy stance leans towards prudence, aiming to protect consumer rights and maintain market stability through strict regulation. Although it has gradually shifted towards neutrality in recent years, the Democratic Party's attention to the cryptocurrency industry is still limited, with the overall economic and financial stability still being the priority.
In contrast, the Republican Party advocates for reducing regulatory restrictions, committed to supporting cryptocurrency industry innovation, and sees it as a key way to enhance the US's competitiveness in the global financial market. Candidates like Trump are trying to attract the support of the cryptocurrency industry by actively supporting cryptocurrencies like Bit, and promising to reform the SEC's regulatory model, in an effort to accelerate the development of the industry in the US.
This policy difference directly affects market dynamics. On the one hand, if the Democratic Party continues to implement a prudent regulatory policy, it may increase the compliance costs of cryptocurrency companies, raise market entry barriers, and potentially inhibit industry innovation. However, this move may also enhance market trust and strengthen investor protection, which could have a positive effect on long-term stable development.
On the other hand, the Republican Party's relaxed policies may accelerate capital inflows and promote the US's leading position in global cryptocurrency innovation, attracting more projects to be implemented in the US. However, the relatively lax regulatory environment may also be accompanied by higher risks, leading to increased market volatility.
The future direction of cryptocurrency policy is crucial to the US's position in global financial innovation. Among the world's major economies, the US faces fierce competition from Europe, Asia and other regions in driving financial technology and cryptocurrency innovation. To maintain a leading position in this emerging field, the US may need to achieve cross-party coordination in future policies to develop a more inclusive, transparent and forward-looking policy framework.
At the same time, by coordinating the relationships between various regulatory agencies and industry organizations, the United States can strike a balance between safeguarding innovation and managing risks, promoting the healthy development of financial innovation.
