Key Insights:

• Chamber of Progress calls on Biden to support clear crypto regulations to counter Trump’s capitalizing on regulatory uncertainty.
• Regulatory clarity on crypto is crucial for Biden to attract Gen Z and Millennial voters in the upcoming election.
• Trump gains crypto industry backing, raising significant funds, while Republicans promise to defend crypto rights in their 2024 platform.

The Chamber of Progress, a center-left tech policy coalition, has urged President Joe Biden to advocate for comprehensive cryptocurrency regulation. The organization argues that the current need for more clarity in the administration’s stance on digital assets has allowed former President Donald Trump to capitalize on the issue. Kyle Bligen, the Chamber’s Director of Financial Policy, emphasized the importance of a “crypto-positive” agenda in a letter addressed to President Biden, highlighting its potential appeal to young voters.

Bligen’s letter underscores the significance of cryptocurrency regulation for millions of Americans involved in digital asset trading. He stated that passing bipartisan regulations on digital assets is a crucial issue for the upcoming election cycle, particularly among Gen Z and Millennial voters. Over half of these demographics reportedly support federal policies that encourage using digital assets in the United States.

Regulatory Uncertainty Under Biden Administration

The Chamber of Progress has criticized the Biden administration for the cryptocurrency industry’s regulatory uncertainty. Bligen pointed out that this ambiguity has negatively affected investors and hindered American innovation in the digital asset space. He highlighted that the current approach has devalued digital assets and limited their practical utility for consumers.

A significant point of contention is the stance of U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, who maintains that existing securities laws and the Howey test are sufficient to regulate digital assets. However, Bligen noted multiple court decisions have rejected this position, contributing to the ongoing regulatory ambiguity. 

Additionally, Bligen criticized President Biden’s veto of a bipartisan resolution intended to overturn the SEC’s Staff Accounting Bulletin 121 (SAB 121), which could prevent banks from safeguarding digital assets. He also mentioned the administration’s opposition to the Financial Innovation and Technology for the 21st Century Act (FIT21), which proposes a joint SEC-CFTC crypto rulemaking regime.

Trump Capitalizes on Lack of Clarity

According to Bligen, former President Donald Trump has leveraged the administration’s lack of regulatory clarity to his advantage. Trump has reversed his position on cryptocurrency, now portraying Biden as an opponent of American technological leadership and economic progress. By committing to courting the cryptocurrency vote, Trump has reportedly raised substantial funds from founders and investors in the digital asset space.

Bligen emphasized that President Biden still has the opportunity to take a leadership role in this area. He urged Biden to collaborate with Congress to develop bipartisan legislation to regulate digital assets. Bligen’s letter suggests that clear support for crypto regulation could help the Biden administration appeal to a significant portion of the electorate, mainly young and tech-savvy voters.

Contrasting Stances on Crypto Regulation

Biden and Trump’s differing approaches to cryptocurrency regulation have become a notable issue in the current political landscape. Kraken founder Jesse Powell, for example, has made a substantial personal donation to Trump’s campaign, criticizing the Biden administration’s regulatory approach. Powell specifically cited Senator Elizabeth Warren and SEC Chair Gary Gensler as adversaries to the cryptocurrency industry.

Senator Warren, seeking re-election, is known for her critical stance on cryptocurrencies and her efforts to build an “anti-crypto army” as part of her campaign. Meanwhile, Gensler’s tenure has seen increased enforcement actions against crypto companies, including Kraken. In contrast, despite his previous criticisms of digital assets, Trump has garnered support from notable figures in the crypto industry, such as the Winklevoss twins and Ark Invest CEO Cathie Wood.

The Republican Party has also integrated pro-crypto positions into its platform for the 2024 elections. The party has vowed to end what it describes as an “unlawful and un-American crackdown” on the U.S. crypto industry, promising to defend the right to mine bitcoin and allow crypto holders to self-custody their tokens. The platform also opposes the creation of a central bank digital currency.

Growing Importance of Crypto in U.S. Elections

Cryptocurrency has increasingly become a focal point in U.S. elections. An online survey by Digital Currency Group revealed that more than 20% of swing state voters consider cryptocurrency a vital issue in the upcoming elections. With over 50 million Americans reportedly owning cryptocurrency, the industry’s influence on the political landscape is growing.

Crypto industry super PACs have raised significant funds for the 2024 congressional elections. According to a consumer advocacy group Public Citizen report, these PACs have raised over $100 million, with substantial contributions from major players like Coinbase and Ripple Labs. The report also highlighted notable donations from industry figures such as the Andreessen Horowitz founders, the Winklevoss twins, and Coinbase CEO Brian Armstrong.

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