The clock is ticking for Democrats on crypto

Last week, crypto was in the news once again. Donald Trump declared himself a shameless supporter by revealing a new line of photo NFTs at Mar-a-Lago. The same day, the Biden administration announced it would veto efforts to undo a widely hated situation. SEC accounting bulletin that prevents the custody of crypto by many companies.

The stories highlighted how encryption has become yet another battleground for this year’s presidential elections. But for many Democrats, the Biden administration’s hard line was as tragicomic as watching Sideshow Bob step on dozens of lechers, over and over again.

At the rate things are going, cryptocurrency owners could be the last straw for the Biden campaign. According to the Paradigm voting As of March, while Biden is losing 44%-43% among non-crypto owners, he is losing 48-39% among the 20% of voters who own crypto. And this is a change from 2020, when crypto owners remember voting for Biden 43%-39%.

As Democrats, we would like to see Biden give crypto people a reason to believe in him. According to research conducted by both our organizations, around 20% of registered voters have encryption. Crypto owners are young, but they are of all partisan stripes. About 20% of Democrats have crypto, about 20% of Republicans have crypto, and about 20% of Independents have crypto. People vote (or don’t vote) for a variety of reasons, but being anti-cryptocurrency is considered a symbol of being anti-innovation, anti-technology, and anti-change. The wounds in the campaign are self-inflicted.

Encryption should not be a partisan issue. No technology should be. The idea of ​​being pro- or anti-encryption should be as ridiculous as declaring yourself pro-computers or anti-toasters. However, under this administration, we long-time progressives who have a healthy skepticism toward technology have watched with increasing concern as our party has cast the entire digital asset industry as villainous. Nowhere is this clearer than with the SEC under the chairmanship of Gary Gensler. The chairman of the SEC testified told Congress early in his term that there was a need for crypto legislation to give the SEC critical additional authority to regulate the space. The following year, he erased this reasonable approach in favor of fighting with his fellow regulators, incessantly attacker the industry in the press, and engaging in a “sinners in the hands of an angry god”campaign against space.

With some notable exceptions, the agency has closed its doors to the entire industry and made it clear that there is nothing it can do to work with President Gensler. The president has provided no path to compliance for the industry, sending a singular message to cryptography: I demand its destruction.

This mentality did not spread throughout the Administration. There are some agencies and regulators that have not taken such a hostile stance. But there has also been little meaningful resistance at the top when it comes to reining in Gensler’s antics. In fact, the White House’s statement calling for a veto on efforts to amend SAB 121 (the rules that severely restrict who can hold cryptocurrencies) was seen by many as a vote of support for the president’s entire approach to cryptocurrencies.

Fortunately, some Democrats in Congress have tried to create space at the SEC. Notably, 21 voted to overturn SAB121, demonstrating that it is not just industry players who perceive political bias here.

We are both crypto progressives and think the party is making a mistake if it allows a few voices to dictate party-wide policy. Sheila got into blockchain after a decade working in nonprofit law and civic technology, due to concerns around big data monopolies and inequality in moving money across borders. Justin got into cryptography after working in and outside of government because it offers an open space to build technology without the control of a single entity. The idea of ​​a decentralized platform owned by tens of millions of people is a relief from our current world of technology and finance, full of closed spaces governed like feudal fiefdoms.

While the headlines focus on the worst players, the reality is that the industry is not a monolith. Responsible companies have been calling for regulation for years, even though they know that regulation will create potentially complicated and costly compliance requirements. But Democratic leaders have largely ignored them. Why? When did Democrats become afraid to legislate and regulate? Why are Democrats opting for aggressive approaches in a conservative judicial system? We are upside down.

It’s not too late to change course. Democrats don’t need to hang a giant “I 💙Crypto” sign at the DNC to appeal to crypto owners; simply saying that they think cryptography is an innovation that requires reasonable regulation would help immensely. But if Democrats don’t at least try to appeal to this voting bloc, they risk sending them to Donald Trump. In an election as important as this, with Biden below in the polls, Democrats should be trying to draw crypto voters into the tent, not mindlessly drive them away.

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