While the potential return of former crypto skeptic Donald Trump to the White House has raised hopes of a new crypto-friendly era in Washington, it remains unclear exactly how the Republican party would approach crypto issues should it take control of the government, experts said.
“How campaign promises get translated into action is always a little hard to predict,” Cato Institute Director of Financial Regulation Studies Jennifer Schulp told Decrypt. “But the Biden administration has really been so hostile in so many different ways that a Republican administration doesn't have to do that much to look more crypto friendly.”
Republicans have made an assertive effort to reach out to crypto voters this campaign season. Last week, the Republican National Committee included pro-crypto language in its party platform, and Trump announced that he would attend and speak at the Bitcoin Conference in Nashville later this month.
After the failed assassination attempt on Trump over the weekend, the crypto market hummed in an apparent reflection of the belief that his election chances had improved.
Ohio Senator J.D. Vance, whom Trump announced as his running mate yesterday, has signaled support for the crypto industry and reported owning between $100,000 and $250,000 in Bitcoin on his 2022 Senate financial disclosure form.
Vance also worked for prominent Silicon Valley investor and crypto proponent Peter Thiel in 2016 and 2017, and received significant backing from Thiel during his 2022 Senate campaign. Thiel and another well-known crypto supporter, Andreessen Horowitz’s Marc Andreessen, backed a venture fund that Vance launched in 2020.
Schulp said Republicans’ interest in creating a crypto-friendly regulatory environment appears to be real.
“I think we see a lot of signs that the GOP is supportive of a different regulatory regime for crypto than what the Biden administration has put forward,” she told Decrypt, adding that there is a significant pro-crypto bloc among Democrats as well.
Schulp pointed to recent legislative activity in the House as evidence of Republicans’ commitment on crypto issues, including the repeal of SEC rule SAB 121—which President Biden vetoed last week—and the passage of the Financial Innovation and Technology for the 21st Century Act, or FIT21. Both efforts were primarily supported by Republicans, although FIT21 also drew support from 71 Democrats.
“The first mark of sincerity is looking at what they’ve done before,” Schulp said. “I think that’s a better indicator of what they'll do going forward than what's being said on the campaign trail.”
Further indication of the nature of Republicans’ commitment on crypto issues will come from their selections for committee chairmanships and other appointments, Technology Policy Institute Senior Fellow Sarah Oh Lam told Decrypt.
Should the GOP retain control of the House, it will need to find a replacement for departing House Financial Services Committee Chairman Patrick McHenry (R-NC), who is retiring in January. Congressional Blockchain Caucus members Rep. Frank Lucas (R-OK) and Rep. Bill Huizenga (R-MI) are in the running to replace him.
And if Trump wins the presidency, crypto-friendly SEC commissioner Hester Peirce (aka “Crypto Mom”) could be a candidate to lead the agency.
It will also be important to monitor whether existing crypto legislation moves in the new congress, Lam said. Bills under consideration include the Lummis-Gillibrand Payment Stablecoin Act, which would create a regulatory framework for stablecoins. There’s also Rep. Tom Emmer’s Blockchain Regulatory Certainty Act, which would clarify that “blockchain developers and service providers that do not custody consumer funds are not money transmitters.”
While the details of the next era of crypto regulation remain to be seen, elected officials in both parties are responding to increased pressure from industry and rank-and-file users, said Competitive Enterprise Institute Director of Finance Policy John Berlau.
“Politicians listen to their constituents, and that’s the way it should work,” Berlau said. “Their constituents are getting younger and more into crypto.”
Edited by Andrew Hayward and Josh Quittner