As pressure builds, then dissipates, then builds again for President Joe Biden to abandon his struggling campaign for re-election, most players in Washington have seen much risk and little reward in coming down publicly on one side of the increasingly heightened debate.
For DC’s crypto policy leaders, the question of whether to push for Biden to drop out is a sticky one.
It’s true that the president’s administration is widely reviled in the crypto industry, for a multitude of reasons—from vocally backing the Security and Exchange Commission (SEC’s) crusade against crypto firms, to its vetoing of key pro-crypto legislation.
On the other hand, the president's administration has started making overtures to the industry that some have found encouraging. Further, it’s completely up in the air who might replace Biden as the Democratic nominee should he step aside, let alone what their stance on crypto might be.
In spite of those question marks, several prominent crypto policy makers and lobbyists who spoke with Decrypt are privately clamoring for Biden to drop out, regardless of who succeeds him.
As the thinking goes: things couldn’t possibly get any worse than they already are.
“The general outlook of the industry is that anything—even if it's another Democratic administration—anybody would be better than what we have now,” one crypto lobbyist who asked not to be named told Decrypt.
“How could it be worse?” they continued. “Could you have a less cooperative SEC chair, for example?”
Biden’s ongoing crisis of legitimacy has prompted some industry leaders to interrogate what exactly about the president’s administration has made it so hostile to crypto. Republicans have pushed the line of late that opposition to crypto is endemic to the Democratic Party.
But multiple crypto policy experts said that the problem likely stems from what they see as the disproportionate influence of noted crypto critic, Senator Elizabeth Warren (D-MA), over the financial services policy of the Biden Administration.
One crypto policy expert who asked not to be named told Decrypt that Warren’s sway over Biden’s banking policy is so total that the prevailing wisdom in Washington is that she and Biden brokered a closed-door deal regarding her say in his administration going back to the 2020 Democratic primary. She appears to have hand-picked numerous key agency appointments, for example, and her fingerprints are all over the White House’s crypto-related decision-making.
“There seems to have been some sort of quiet deal where she would get free rein over financial services policy in exchange for staying out of presidential politics,” the policy expert said. “Her worldview has been the cornerstone of Biden's financial services policy.”
If Biden is axed, so the thinking goes, then Warren’s sizable influence over presidential fiscal policy will also be out on the street.
“Being that Senator Warren has such influence with this administration, maybe she would have less in another,” the aforementioned crypto lobbyist said.
Another axis that gives crypto’s DC contingent hope when it comes to Democrats is age.
The Democratic Party’s most vocal crypto proponents tend to skew younger. Given the centrality of age to Biden’s current public relations crisis, most of the leading candidates to replace him—like Vice President Kamala Harris, Michigan Governor Gretchen Whitmer, and Maryland Governor Wes Moore—are much younger than Biden. That gives industry leaders hope.
“I think there's a lot of opportunity with younger members of the party to ultimately rise up and be much friendlier to the crypto industry,” the crypto policy expert said.
One prominent crypto lobbyist who requested anonymity for this story, however, criticized colleagues who they felt were overstating the impact that a Biden dropout would have on the industry—calling such forecasters “unsophisticated people.”
“You have to play the hand you're dealt,” the lobbyist told Decrypt. “We have this administration, we have this SEC chair, we have this Congress, and we should be doing what we can do in this moment.”
“That is the only way to be effective at policy,” they added.
Meanwhile, as the Democratic Party struggles to determine its best path forward into November, Republicans have aggressively ramped up a campaign to court crypto advocates.
On Monday, the GOP passed a draft party platform that explicitly embraced crypto, a first for a major American political party.
For years, Washington’s crypto lobby has insisted that it doesn’t want blockchain tech to become a partisan issue—that the long-term security and health of the industry would be far better served by cementing its permanent status with bipartisan consensus.
But while the Democrats’ choice for president—and that nominee’s potential treatment of the crypto industry—remains an enduring question mark, the fate of the industry should former president Donald Trump win in November is less ambiguous.
“It does look pretty clear at this point that if Trump and Republicans are in charge, that's definitely going to be a positive thing for the crypto industry,” Kristin Smith, CEO of the prominent crypto lobbying group the Blockchain Association told Decrypt.
Edited by Andrew Hayward