‘Two Main Factors Will Heavily Influence Kamala’s Position’—Experts Weigh in on Democrats Revisiting Crypto Policies
- Kamala Harris and the Democratic party have opened discussions with key cryptocurrency industry players.
- Donald Trump’s pro-crypto advocacy is gaining the support of Web3 advocates and leaders.
- Crypto has been identified as a significant issue for 20% of voters in key battleground states.
The Democratic party is reportedly in contact with notable crypto industry entities as the party bids to capture the crypto vote.
However, after years of inaction, their sudden interest in crypto may be seen as political appeasement while leading Republican candidate Donald Trump soaks up the crypto industry’s attention.
Democrats Look to Crypto?
The Democratic party is making a concerted effort to adopt a pro-crypto agenda.
According to a report from the Financial Times , Democratic Presidential nominee Kamala Harris and her team of advisers have been actively engaging with crypto industry giants, including Coinbase, Circle, and Ripple Labs.
Building on the momentum of the party’s pro-crypto pivot, a group of 14 Democratic members of Congress have signed a letter urging the party to revamp its stance on cryptocurrency policy. The letter reads:
“Over 20% of voters in key battleground states identified crypto as a major issue in the 2024 election, and it is critical that our party presents a persuasive case to crypto voters while ensuring that consumers benefit from thoughtful and appropriate regulation.”
The letter also mentions the U.S. Securities and Exchange Commission (SEC), which is “largely” to blame for the public’s perception that the Democrats are hostile towards crypto.
Despite the Democrats’ newfound love for crypto, Gemini founder and crypto billionaire Cameron Winklevoss warned that Harris’s shift to crypto may be too little, too late.
“Kamala Harris, please don’t bother unless you are prepared to take swift, bold, and concrete action. You can’t burn bridges for 4 years and expect to rebuild them with words alone,” Winklevoss wrote on X.
Ripple CEO Brad Garlinghouse also took to X to give the Harris campaign some timely advice. Garlinghouse told Harris to distance herself from “folks who spout utter nonsense,” pointing to Rep. Brad Sherman. Garlinghouse noted that the Democrats aren’t going to win any votes if they continue down the anti-crypto route.
In a conversation with CCN, Alex Momot, the founder and CEO of blockchain project Peanut Trade, suggested:
“Two main factors will heavily influence Kamala’s position. The first factor is the attitude of her boss and the current Democratic administration towards crypto. The second factor is the statement Trump made recently at the Bitcoin conference in Nashville, where he promised significant benefits for the crypto world if he gets elected.”
“She’ll need to navigate carefully to find a position that doesn’t compromise the Democratic Party’s stance while acknowledging these new developments. I believe this will lead to some concessions and progress beyond the current passive-aggressive approach of the American government,” Momot continued.
A Change of Tone
Under the stewardship of SEC Chair Gary Gensler, the crypto industry has had an uphill battle. The SEC has put dozens of enforcement actions against the crypto industry, billions in fines, and lengthy ongoing courtroom battles to determine the classification of crypto assets.
Mark Smargon, the founder and CEO of the decentralized payment platform Fuse.io, noted that the industry “is hungry for regulatory clarity.” He explained that regulators have moved from viewing every crypto asset as a security to approving Ethereum (ETH) exchange-traded funds (ETFs). He added that “we need to let the dust settle, and new guidelines need to be put in place for the Web3 industry.”
“The SEC is the main player in this space, and it’s seen as a weak position. If it were serious, other agencies like the DOJ would also be involved, but they only step in for specific crimes,” elaborated Momot.
“What we see instead is essentially extortion under the guise of vague compliance requirements. This lack of clear rules allows the SEC to generate revenue for the budget, but it drives businesses out of the U.S., undermining American leadership in the Web3 market. To maintain its leadership, the U.S. must completely overhaul its approach,” he said.
Meanwhile, the Republicans appear to be soaking up the crypto vote. It’s worth noting that Harris had the opportunity to make her presence felt within crypto and at least espouse some policy after being invited to attend the Bitcoin 2024 Conference in Nashville, Tennessee. However, she declined, leaving Trump to soak up significant stage time and rally the crypto base.
A Change of Heart
With crypto emerging as a clear voting issue in the U.S., supporters of the Biden candidacy called on Democrats to take crypto seriously. Naturally, this was largely in response to Trump’s newfound passion for Bitcoin (BTC) and cryptocurrencies on the campaign trail.
In his 51-minute speech at the Bitcoin 2024 Conference, Trump highlighted his commitment to Bitcoin and crypto. Much to the joy of the audience, the Presidential hopeful said that, if elected, he would fire SEC Chair Gensler.
Smargon praised Trump’s reversal of his anti-crypto stance. He explains that it pushes other candidates to discover more about the issue, educate themselves, and establish some position on it. Secondly, he sees it as a “normalizing signal” for both domestic and foreign markets.
After publicly stating that he wants the U.S. to become the world’s Bitcoin mining hub and making several promises to bolster the domestic crypto industry, Trump has certainly galvanized crypto voters.
Now, the Democrats are contending with Trump’s enormous support from the crypto industry and crypto voters. Many would say that at this point in the race, anything the Democrats do will be too late.
“Kamala Harris now has to consider his [Trump’s] remarks while forming her own stance to avoid losing the attention of the substantial crypto community. Otherwise, they might easily shift their support to Trump, especially since big business often aligns more with the Republican viewpoint,” opined Momot.
The Bigger Picture
Some industry experts posit that, regardless of whether or not the Democrats’ renewed energy toward crypto will make a difference in the election, this evolving stance is a net positive for crypto.
Aleksander Grandwilewski, the Head of Education at Decentralized Masters, explained that the Democrats are “being pushed” to take a crypto-friendly approach:
“A few months ago, Dems were more divided on crypto. Some wanted stricter regs, while others were open to innovation. This created a lot of uncertainty for businesses and investors in the crypto space. But now the party seems to be getting on the same page, recognizing that supporting crypto could be a smart move.”
“If the U.S. wants to retain its leadership in the Web3 space, it must address these three critical areas: regulatory clarity, better integration with the banking sector, and a more suitable tax framework,” Momot concluded.
