Last week, cryptocurrencies were in the news again. Donald Trump unabashedly declared himself an advocate while unveiling a new line of photo NFTs at Mar-a-Lago. The same day, the Biden administration announced it would veto an effort to rescind a widely hated SEC accounting bulletin that prevents many companies from storing cryptocurrencies.
These articles highlighted how cryptocurrencies have become a new battleground in this year's presidential election. But for many Democrats, the Biden administration's tough stance felt as tragic as watching Sideshow Bob step on dozens of pitchforks over and over again.
If things continue like this, virtual currency owners may become the straw that breaks the Biden campaign's back. According to a March Paradigm poll, Biden lost 44% to 43% among non-cryptoholders, but lost 48% to 39% among the 20% of voters who own cryptocurrencies. ing. And this is a change from 2020, when we recall that crypto holders voted for Biden by 43% to 39%.
As Democrats, we hope that Mr. Biden will give those in the crypto industry a reason to believe in him. According to polls conducted by both of our organizations, approximately 20% of registered voters own cryptocurrencies. Cryptocurrency owners skew young, but they come from all partisan stripes. About 20% of Democrats own cryptocurrencies, about 20% of Republicans own cryptocurrencies, and about 20% of independents own cryptocurrencies. People vote (or don't vote) for a variety of reasons, but being anti-crypto is seen as a proxy for being anti-innovation, anti-technology, and anti-change. The wounds he sustained during the election campaign were self-inflicted.
Code should not be a partisan issue. That's not how technology should be. The idea of being for or against cryptocurrencies should be as ridiculous as expressing yourself as being for computers or against toaster ovens. But under this administration, those of us who are lifelong progressives with a healthy skepticism toward technology are increasingly concerned to see our party demonize the entire digital asset industry. I've been watching over you. Nowhere is this more evident than at the SEC, led by Chairman Gary Gensler. Early in his tenure, the SEC Chairman testified before Congress that legislation was needed to give the SEC significant additional powers to regulate the crypto space. Over the next year, he erased that rational approach in favor of fighting his fellow regulators, relentlessly attacking the industry in the press, and “Sinners in the hands of an angry God” Campaign Against Space.
With a few notable exceptions, the agency has closed its doors to the entire industry and has made it clear that there is nothing it can do to work with Chairman Gensler. The chairman has not offered the industry any path to compliance, and he is sending a singular message to cryptocurrencies: “I demand your destruction.”
This idea has not permeated the entire government. Some government agencies and regulators have no such hostility. But there has also been little meaningful pushback from leadership to rein in Mr. Gensler's antics. Indeed, the White House's statement calling for a veto on efforts to change SAB 121, a rule that severely limits who can store cryptocurrencies, was seen by many as a vote of support for the chairman's overall approach to cryptocurrencies. Ta.
Fortunately, some Democrats in Congress are trying to carve out space from the SEC. Remarkably, 21 people voted to overturn SAB 121, indicating that industry insiders are not the only ones recognizing political bias here.
We are both crypto progressives and believe that the party is making a mistake when it allows a few loud voices to dictate the policies of the entire party. Sheila became interested in blockchain after 10 years in nonprofit law and civic technology due to concerns about big data monopolies and inequities in the movement of funds across borders. After working inside and outside of government, Justin became interested in cryptocurrencies because they provide an open space to build technology without the control of a single entity. The idea of a decentralized platform owned by tens of millions of people is a relief from the current world of both technology and finance, full of feudal and closed spaces.
Although the headlines focus on the worst actors, the reality is that the industry is not monolithic. Responsible businesses have long sought regulation, even though they know it can create potentially complex and costly compliance requirements. But Democratic leaders have largely ignored them. why? When did Democrats become afraid of legislation and regulation? Why have they chosen to pursue an aggressive approach in a conservative judicial system? We are upside down.
It's never too late to change direction. Democrats don't need to hang up a giant “I'm Crypto💙” sign at the DNC to appeal to crypto holders. Just saying that you think cryptocurrencies are an innovation that requires reasonable regulation can be very helpful. But unless Democrats at least try to appeal to this voting base, they risk sending them to Donald Trump. In an important election like this one, where Biden is trailing in the polls, Democrats should try to draw crypto voters into their tent rather than blithely kick them out.
