Trump and Biden are courting Bitcoin. Is the US crypto regulation about to take a turn?

Author: Terry, Vernacular Blockchain

4 years ago, if someone told you that in this round of US presidential elections, candidates from both parties would actively promote themselves Do you believe that the recognition and support for the encryption industry even reaches the level of "comparison"?

You will definitely think that person is crazy.

But the reality is so dramatic. For the encryption industry, the 2024 U.S. presidential election has become a completely different political showplace from the 2020 and 2016 elections - regardless of the issues throughout the election cycle Both the settings and the public statements of the presidential candidates of both parties have begun to involve cryptocurrency as never before, and the candidates of both parties are even "comparing" their own open attitudes.

This article will briefly explore the undercurrent behind this significant variable, that is, whether the U.S. cryptocurrency policy trend is really turning the wheel, and how the attitudes of many politicians and regulators will change in 2024. What does it mean? How will the encryption and Web3 industries be affected?

01 Trump and Biden’s “Cryptocurrency War”

Although 2024 The first TV debate of the U.S. presidential election has not yet begun, but Trump and Biden have already begun to exchange opinions on many issues, among which the open attitude towards cryptocurrency is a key arena.

First of all, Trump, who was still in office 5 years ago, publicly stated that he "does not like Bitcoin and other cryptocurrencies because they are not currencies, their values ​​are highly volatile and have no substance." "Basic", but as a rare heavyweight political figure who has issued several NFT series in a row, Trump is indeed qualified to flaunt his strong support for cryptocurrency.

Especially in the context of the increasingly heated election, Trump has increasingly positioned himself as a "crypto-friendly" candidate, claiming to be a leader in financial technology innovation. Advocates, On May 22, the cryptocurrency donation website was opened to officially accept crypto donations - in addition to Bitcoin and Ethereum, it also supports USDC, SOL, XRP, DOGE, ZRX, SHIB and other cryptos currency.

He even made frequent public statements to demonstrate his tolerance for cryptocurrency. : Lead the "cryptocurrency army", "drive the campaign to victory on November 5 (election day)" and so on.

In contrast, Biden, who has always shown a strict regulatory attitude, seems to have loosened his stance because of concerns about the election, trying to win the support of young voters -After all, groups of color and young people People were a key Democratic vote base for Biden's election victory in 2020, and their recognition of cryptocurrency is the highest among all generations and ethnic groups:

In six key swing states More than 20% of voters see cryptocurrency as an important issue; another nationwide survey of registered voters commissioned by crypto company Paradigm found that crypto asset ownership rates are higher among communities of color and among younger people. high.

So as the Biden reelection campaign struggles to attract Gen Z voters, it is now hiring a "meme manager" to manage Internet content and memes, including Meme).

In addition, U.S. presidential candidate Robert F. Kennedy Jr. (nephew of former President John F. Kennedy) is also a staunch supporter of encryption. “Cryptocurrency is our way out of the The Fed relies on exports, which is the best way to fight inflation. It takes away control from the government and the monopoly banking system that uses money printing to transfer wealth to billionaire oligarchs while impoverishing ordinary Americans. Agree that Crypto equals freedom, please help me advance this vision as President."

Overall, an election year is certainly a critical factor for those in the United States who directly or indirectly hold crypto assets. It is already a force that cannot be ignored, especially when the poll data are tight, and the "critical minority" are the meat and potatoes, which can be seen from the passage of the FIT21 bill at this time.

02 From FIT21 bill to regulatory softening attitude

Whether it is Trump’s positive statement, Is it Biden’s timely turn that is essentially to win over the votes of the crypto community? Just as both of them have gone to extreme lengths to open accounts on Tiktok for campaign promotion, it is just one of the measures to deal with the election situation in the election year. That’s all.

To put it bluntly, politicians’ openness to crypto-assets is more like a means in the context of 2024. The loosening of administrative, legislative, and regulatory levels will be more worthy of attention next. An important observation window.

It is worth noting that on May 22, the Financial Innovation and Technology Act for the 21st Century (FIT21 Act) was passed by the House of Representatives with an overwhelming vote of 279 to 136. This bill established the digital asset The regulatory framework is considered to be one of the most far-reaching bills currently affecting the encryption industry.

In fact, the core point of this bill for encryption supervision is to divide the regulatory powers. That is, this bill clearly defines two agencies that supervise crypto assets:One One is the U.S. Commodity Futures Trading Commission (CFTC), and the other is the U.S. Securities and Exchange Commission (SEC).

If a crypto asset is defined as a commodity , then it is regulated by the CFTC; if it is defined as a security, it is regulated by the SEC.

The specific judgment of whether a crypto asset is a commodity or a security can be subdivided into "investment contract (The Howey Test)", "use and consumption", "degree of decentralization", "Functional and technical characteristics", "market activities" and other factors.

This is equivalent to clarifying comparable regulatory rules for a series of current encryption projects, which is a big step forward compared to the previous unknown state where the SEC's stick was waved around— —After all, as we all know, compared to the SEC, which takes frequent enforcement actions in the encryption field, the CFTC has a relatively mild attitude.

However, as news of the Ethereum spot ETF leaked out, the regulatory attitude, especially the SEC's softening attitude was also very obvious: during the same period, the US SEC's trading and market department called the trading platform to tell them that it would approve it this week. 19b-4, which was quickly approved, almost a 180-degree turn.

Of course, this change has a strong political flavor. To put it bluntly, the Democratic Party urgently needs young people to vote. If you look at what Biden has done from a campaign perspective, the main positioning is to position himself as a " An octogenarian with a vision.”

Only the finalization of the FIT21 bill is the most noteworthy information. However, there is no corresponding bill in the Senate so far, so it will not become law yet. Although it has taken a first step, it is still ahead of the curve. The road is long.

No matter what, the loosening of administrative and legislative levels will always prompt a shift in supervision. Regardless of the actual subsequent direction, this will be critical for crypto assets to further enter the mainstream and obtain a legal and compliance framework. It's a turning point.

03 Behind the variables, the rising influence of the crypto community

And the undercurrent behind all these variables is accelerating. front desk.

On the one hand, there is an increasingly large group of encryption users, whose importance to elections cannot be ignored. Just like the recent market discussion about "50 million people in the United States holding crypto assets", it is essentially a matter of the U.S. government and opposition parties regarding crypto assets and crypto asset holders in the context of the 2024 presidential election in the United States. The attention of the product has begun to rise visibly with the naked eye.

Although it is not ruled out that the data will be used exclusively for the 2024 election to soften the presidential candidate’s attitude to win over crypto voters, it also illustrates from the side that even if it is just a blank check project before the election, the more More and more politicians and candidates are beginning to have to "please" this part of the vote.

On the other hand, the encryption industry’s lobbying and influence have also begun to penetrate into the policy-making field. According to DL News citing data from OpenSecrets, a platform that tracks political donations, the encryption industry Lobbying spending hit an all-time high of $24.7 million in 2023, and in the first quarter of 2024, the crypto industry spent another $5.6 million.

Cryptocurrency industry lobbying peaks in 2023, source: datawrapper.de

Under the water, the number of U.S. members of Congress accepting political donations from cryptocurrency-related teams is visibly rising. , they began to stand on the side of the encryption industry to safeguard common interests:

For example, on May 8, 21 House Democrats voted in support of a resolution to combat the SEC announcement, and on May 16, 11 Senate Democrats also voted in support of the resolution, and an OpenSecrets analysis found that many of these members of Congress are major recipients of political donations from the cryptocurrency industry.

The cryptocurrency industry has made significant donations to members of Congress, source: datawrapper.de

04 Summary