Regulation
Where Biden’s Top Six Potential Replacements Stand on Crypto
U.S. Vice President Kamala Harris and California Governor Gavin Newsom are two potential replacements… [+] for President Joe Biden should he decide to withdraw from the election. (Photo by SAUL LOEB/AFP) (Photo by SAUL LOEB/AFP via Getty Images)
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President Biden’s dismal performance in Thursday night’s debate has Democrats considering a replacement ahead of next month’s nominating convention in Chicago. While the president appears determined to remain atop the ticket, at least for now, attention is shifting to how those successors might fare in the general election and their policies on critical issues.
A few thousand votes could be decisive, and suddenly cryptocurrencies are becoming a winning campaign theme for Republicans, including former President Donald Trump. Although Trump said it was “not a fan” of cryptocurrency during his term from 2016 to 2020, backtracked in late May, vowing to make the United States a world leader in cryptocurrency by ending regulatory hostility. Republicans in Congress are also leading efforts to craft crypto-friendly legislation that would pave the way for the broad assimilation of the $2.4 trillion industry into the American economy.
This policy shift is in stark contrast to the Biden administration, which has drawn ire from the community. This is primarily due to the Security and Exchange Commission (SEC) under Chairman Gary Gensler’s penchant for suing exchanges and token issuers for alleged violations of 90-year-old federal securities laws, rather than giving in to industry demands by creating new cryptocurrency regulations.
“Imagine if you had 20,000 people in Wisconsin voting on one issue and saying, ‘You know what? Either I’m not going to show up and push the button for Joe Biden, or I’m going to vote for Trump because he’s pro-crypto,’” says former Trump White House communications director Anthony Scaramucci, who is now supporting Biden’s reelection campaign.
Additionally, the cryptocurrency industry is flexing its muscles more than ever. In the wake of Bitcoin’s record high of $74,000 in March, political action committees focused on cryptocurrency issues have raised more than $100 million, the third-highest amount of any cause this election cycle, from Coinbase, Coinbase CEO Brian Armstrong, Ripple, Andreessen Horowitz, and Cameron and Tyler Winklevoss, according to a report by Public citizen. They have already defeated anti-crypto candidates in key primaries in New York and California. These ready-to-spend funds could become even more critical for a Biden replacement who would need to quickly assemble a campaign war chest.
Neither candidate responded to Forbes’s inquiries about their cryptocurrency policies after Thursday night’s debate, but here’s a look at their previous positions and legislative history with the sector.
Vice President Kamala Harris
Vice President Kamala Harris (Photo by Ethan Miller/Getty Images)
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Vice President Kamala Harris has been quiet about her stance on cryptocurrency regulation despite hailing from the tech-dominated San Francisco Bay Area. However, if she were to win the nomination (or the presidency, for that matter), it’s fair to expect her policies to mimic those of the current president.
The Biden administration has pledged to take a “the whole government” approach to regulating cryptocurrencies, signing an executive order in September 2022 that outlines six priorities: consumer and investor protection, financial stability, financial crime, global competitiveness, financial inclusion, and innovation, though most of the activity so far has focused on enforcement actions by the SEC. President Biden also recently vetoed Congress’s repeal of SEC Staff Accounting Bulletin 121, which essentially barred banks from holding digital assets like bitcoin and ether on behalf of customers, much to the dismay of the industry.
California Governor Gavin Newsom
California Governor Gavin Newsom (Photo by Justin Sullivan/Getty Images)
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Newsom has taken a cautious stance on cryptocurrency regulation as the elected leader of a state known for both progressive policies and technological innovation.
In May 2022, at the start of the bear market, Newsom signed a executive order to create a framework for licensing cryptocurrency firms in the state. However, he vetoed a draft of that bill that September, just weeks before the FTX crash, said it was “premature to block a licensing structure” and that “a more flexible approach is needed.” The governor was criticized by consumer advocates for failing to act in time, in response to which he said to The Los Angeles Times he did not regret his decisions.
Newsom finally signed Assembly Bill 39, titled the Digital Financial Assets Law, in October 2023, which directs the Department of Financial Protection and Innovation (DFPI) to create a licensing and enforcement framework for the state by July 1, 2025. At the time of signing, Newsom warned of the law’s “ambiguity” and urged further refinement, with the DFPI currently taking public comments.
California’s law has the potential to compete with New York’s BitLicense regulatory regime, a controversial piece of legislation that is nevertheless the most robust regulatory framework in the country. According to Bloomberg Lawapproximately one in four North American cryptocurrency companies is headquartered in California.
Colorado Governor Jared Polis
Colorado Gov. Jared Polis (Photo by Jason Connolly/AFP) (Photo by JASON CONNOLLY/AFP via Getty … [+] Images)
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Polis is the Democratic presidential candidate who is the friendliest to the cryptocurrency industry. The libertarian Democrat positions cryptocurrency as an example of technological and financial freedom, describing it as an antidote to “big government” at the state Capitol on Feb. 27, the so-called “Blockchain Day,” 2022.
Like Trump, Polis has accepted campaign contributions in cryptocurrency, accepting major tokens like bitcoin and ether and even “memecoins” like dogecoin and shiba inu coin. The state of Colorado also began receiving cryptocurrency tax payments under his leadership in 2022, though those payments It must be done via Paypal Cryptocurrencies Hub, which converts them into fiat currencies before the transaction.
However, most of Polis’s advocacy for the industry ended after 2022. Polis spoke at ETH Denver in February of that year, saying he wanted Colorado to become “the first digital state.” He had also spoken at the convention of 2020 AND 2021. In 2022, he also mooted putting the state’s cattle branding registry on the blockchain to make government processes more efficient, transparent and decentralized. He said the state’s business cooperative laws made it an ideal place to create a decentralized autonomous organization, or DAO. Polis said at the time that he did not personally own any cryptocurrency.
In 2016, when Polis was a member of the House of Representatives, he was a founding member of the Congressional Blockchain Caucus.
Polis has not spoken about cryptocurrencies since the FTX crash.
Illinois Governor JB Pritzker
Illinois Governor JB Pritzker (Photo by Paul Natkin/Getty Images)
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Pritzker has been relatively quiet on cryptocurrency, engaging with the sector primarily as an opportunity to promote economic development in Chicago. In 2021, for example, Pritzker visited the Grant Park-adjacent offices of cryptocurrency trading platform Coinflip to celebrate the announcement of its new headquarters. Pritzker said that “the future of crypto is in Illinois.” Like Polis, much of Pritzker’s tech enthusiasm has shifted toward supporting the quantum computing sector since 2022.
The Illinois State Financial Protection Agency announced a series of cryptocurrency consumer protection bills in February last year, but Pritzker has not publicly taken credit for them. The two-bill series focuses on updating financial regulations for digital money transmission, which a press release likens to New York’s BitLicense and California’s proposed licensing structure, and strengthening enforcement to protect ordinary people. Democratic state Representatives Mark Walker and State Senator Laura Ellman sponsored the bills.
Pennsylvania Governor Josh Shapiro
Pennsylvania Governor Josh Shapiro (Photo by Mark Makela/Getty Images)
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Shapiro has not publicly shared his views on federal regulation of cryptocurrencies. However, state tax breaks created to encourage the creation of data centers in the state have been used by cryptocurrency mining companies, driving up costs for taxpayers from From 5 to 90 million dollars by 2027. Environmental group Save Carbon County sued Polis and a cryptocurrency mining company in March for allegedly polluting the environment, even though it had received $29 million in tax credits from the state over the past two years.
Pennsylvania Department of Banking and Securities moved to include “cryptocurrency” in its definition of “money” when overseeing the state’s money transmission law, effectively asserting that it has the authority to regulate certain aspects of the state’s cryptocurrency industry. That’s a reversal from a 2019 policy in which the department said it did not consider cryptocurrency to be money for its purposes. There have yet been no major regulatory actions as a result, and Shaprio has not taken responsibility for or commented on the change.
Gretchen Whitmer
Michigan Governor Gretchen Whitmer (Photo by Bill Pugliano/Getty Images)
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Michigan Governor Gretchen Whitmer has also yet to publicly comment on cryptocurrencies. In December 2019, the last year of Whitmer’s first year in office, four bills were signed into law to include cryptocurrencies and distributed ledgers in the state’s criminal code, allowing the state to prosecute financial crimes. State laws also require a money transmitter license, which includes “funds in an electronic wallet” according to the Department of Insurance and Financial Services.