Donald Trump has become a crypto bro hero.
Though he once tweeted “I am not a fan of Bitcoin and other Cryptocurrencies,” he is now wholeheartedly embracing crypto. He has promised to create a bitcoin national reserve, fire SEC chief Gary Gensler, and make the U.S. the “crypto capital of the planet.”
There’s good political strategy here: according to a recent poll, 1 in 7 voters own crypto, and they are trending more likely to vote for Trump.
What can Democrats do to compete?
Although the Biden administration has been pretty terrible to crypto investors, the Harris/Walz campaign has an opportunity for a fresh start.
Here are some ideas for a realistic, practical platform for a Democratic crypto platform that would help them swing the crypto vote.
Issue #1: Regulatory Clarity
I want to shout it from the rooftops: REGULATORY CLARITY.
This phrase has become so ingrained within the crypto community that Harris can simply say these two words — “Regulatory Clarity” — and the crypto donations will come flooding in.
This issue comes down to one simple question: are crypto investments securities, like stocks? They seem to be similar, but in other ways they’re different. Most agree we need to update the Securities Act of 1933, which (along with the Howey Test of 1946) is still being applied to regulate crypto.
Better regulation would make everyone feel better about investing in crypto. Thus, “regulatory clarity.”
Specifically, Democrats could clarify which crypto assets are commodities (overseen by the CFTC) and which are securities (overseen by the SEC) – and create a framework for telling the difference.
While they’re at it, Democrats could establish regulatory guidelines for crypto exchanges, so the government can oversee them like banks (which they really are).
Issue #2: Green Mining
This is such a no-brainer: create incentives for environment-friendly bitcoin mining.
Everyone agrees that bitcoin mining uses too much energy. Although progress is being made on converting much of this to renewable energy, as well as using stranded and wasted energy, Democrats could use tax incentives to hyperscale green mining.
By funding more green crypto mining in America, Democrats could bring a new industry to middle America, creating thousands of new jobs and enormous economic opportunity. (Read a case study from rural Pennsylvania here.)
Take El Salvador, which is leveraging its own natural energy resource: the country has mined over $350 million in bitcoin using geothermal. The United States is much larger than El Salvador, with many more renewable resources just waiting to be used.
Green mining is an easy win. It’s easy to understand, and perfectly aligns with Democratic voters.
Issue #3: Innovation and Economic Growth
Once they establish regulatory clarity, Democrats can then create programs to support crypto and blockchain startups, creating good jobs and growing the economy.
Democrats already have a playbook: Bill Clinton oversaw the famous Telecommunications Act of 1996 during his first term, which paved the way for an explosion of Internet growth during Clinton’s second term.
Such programs would certainly earn the support of large financial institutions, who understand that crypto is the future of money. (Note how quickly the financial industry moved to embrace bitcoin ETFs, once they were legally approved.) And large financial players have large financial pocketbooks.
(No doubt there are powerful forces that would prefer a no-crypto status quo, and perhaps these interests have driven the Biden administration’s policy to date. But with Republicans squarely in the pro-crypto camp, these large donors would have nowhere else to go.)
In a first Harris/Walz term, they can get regulatory clarity (a crypto equivalent of the Telecommunications Act of 1996). In a second term, they can accelerate the economy by supporting crypto startups (like the explosion of Internet startups in the late 1990s).
Issue #4: CBDC Research
Democrats can commit to researching and potentially developing a U.S. Central Bank Digital Currency (CBDC) to maintain America’s financial leadership.
This is a clear differentiator with the Trump campaign, which has come down as anti-CBDC. But why?
Money is increasingly being converted to crypto, as shown by the chart above. Would the U.S. prefer that money be converted into stablecoins, or held in a digital form of U.S. dollars? They’re not the same thing.
China already has a CBDC, and Russia is working on a crypto payments system that will support BRICS countries, but not the dollar. If the U.S. wants to maintain its status as the world’s default currency, it has to get with the times.
The threat is the “de-dollarization” of the global financial system. But the opportunity is for the U.S. to lead the charge in developing international standards for crypto.
And that will keep the dollar reigning supreme, even as money goes digital. It’s obvious that we need a digital dollar, and the Democrats can deliver.
Issue #5: Bipartisan Policymaking
Nothing happens unless both parties support it.
This simple truth belies all the political rhetoric that we hear around campaign season. While each side would have you believe the other side is full of thieves and liars, the truth is they have to work together to get anything done.
A great number of moderate voters understand this. They know that either party, if left to itself, can take issues to extremes. That is why the balance of power in America is so hard-fought: each party serves as a check on the other.
This is also why sensible policies that can get bipartisan support – that can be approved by both Democrats and Republicans – are critical to moving the country forward. (In crypto, FIT21 is a good example.)
Although it’s not the red meat that will get the party base fired up, Democrats have an opportunity to reach more of us in the middle by simply promising to work collaboratively with the other side.
This would be a huge differentiator with the Trump campaign.
Democrats: promise to build bipartisan support on better crypto regulation, and the election is yours.
Democrats Can Win the Crypto Vote
There’s an enormous opportunity to build a meaningful platform around crypto that is different from Donald Trump.
The best part: these things need to be done.
Whoever starts the next term will have to deal with all these issues, and Democrats have an opportunity to set the agenda now.
And if all else fails, just fall back on the two critical words: “regulatory clarity.” Those two words just might win an election.
