Regulation
Election year could also be cryptocurrency year
05/27/2024 4:05:59 PM ET
2024 is shaping up to be a pivotal year for cryptocurrencies as the political and regulatory landscape changes across major economies.
The US has already seen significant developments, such as the SEC’s approval of a spot Ether ETF, signaling a potential softening of regulatory stances towards digital assets.
This comes at a time when both former President Donald Trump and current President Joe Biden are making strategic moves to court the crypto community, setting the stage for a crucial election that could dramatically affect the future of cryptocurrency regulation.
As the world watches, other major economies, including India and the United Kingdom, are also grappling with their own regulatory frameworks and political dynamics, making 2024 a pivotal year for the global cryptocurrency market.
US elections could reshape cryptocurrency regulation
The political landscape in the United States is undergoing significant changes with potential implications for the cryptocurrency market.
Both former President Donald Trump and current President Joe Biden have changed their positions on cryptocurrencies, which could have a dramatic impact on the future of the market.
The Trump campaign recently began accepting donations in various cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and US Dollar Coin (USDC), as well as smaller coins such as Shiba Inu (SHIB) and Dogecoin (DOGE).
This move appears to target young male voters who are increasingly investing in digital assets. Trump has already shown support for cryptocurrencies, raising millions through his NFT Trump Digital Trading Cards projects.
In contrast, the Biden administration is signaling a potential shift in its approach to regulating cryptocurrencies. The recent approval of a spot Ether ETF by the Securities and Exchange Commission (SEC) indicates a more favorable stance towards digital assets.
This change could align the administration with the crypto community ahead of the November elections. However, Biden’s focus remains on consumer protection and financial stability, which will likely lead to tough regulations.
“SEC approval of a spot Ether ETF suggests a strategic pivot,” says Tim Delhaes, CEO of Grindery.
“This could mean a softer regulatory environment for cryptocurrencies under the Biden administration.”
The minor role of cryptocurrencies in the 2024 Indian elections
In India, where the population exceeds 1.4 billion, the importance of cryptocurrencies in the upcoming elections is minimal.
The country, which has 93.5 million cryptocurrency owners (6.55% of the population), has seen significant regulatory measures under the administration of Prime Minister Narendra Modi.
These include a 30% tax on profits from the sale of digital assets, no compensation for losses, and a 1% tax deducted at source for each transaction.
Despite these measures, cryptocurrencies remain a niche issue among Indian voters.
More pressing economic and social concerns overshadow the debate over digital assets. The BJP manifesto, for example, focuses on educating seniors about digital scams and combating threats to digital sovereignty.
The Indian National Congress (INC) emphasizes digital ledgers for agricultural transactions and addresses cybersecurity issues within the financial infrastructure.
Balaji Srihari, business head at CoinSwitch, told Invezz:
We believe the government’s approach to taxing cryptocurrencies is part of a broader effort to protect investors and ensure the stability of the financial system. Given the history of the crypto ecosystem, such cautious policy measures are understandable.
UK Elections Delay Cryptocurrency Legislation
The UK crypto landscape has also been affected by political developments. Prime Minister Rishi Sunak’s call for a general election on July 4 has delayed new cryptocurrency legislation, pushing long-sought regulations back by at least six months.
This delay comes as other regions, including the European Union, Dubai and Hong Kong, accelerate their cryptocurrency regulatory frameworks.
Ian Taylor, an adviser to the board of trade body CryptoUK, expressed concern about the delay.
It’s a net negative, actually, because we’re laggards. We are behind the rest of Europe first, and then other jurisdictions in Asia and the Middle East.
Despite these short-term delays, the long-term growth of the UK cryptocurrency sector, supported by a global financial center and ample investment capital, remains promising.
Both major political parties have committed to making the UK a hub for digital financial services.
Global implications of cryptographic regulations
The upcoming elections in these major economies will significantly influence the future of cryptocurrency regulations globally.
In the United States, the outcome of the presidential election could determine the pace and nature of cryptocurrency regulation, impacting international standards.
If Biden wins, expect a continuation of current regulatory approaches. If Trump wins, attention could shift, affecting the pace of international regulation of cryptocurrencies.
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