You didn’t hear either candidate breathe a word about cryptocurrency at their big Atlanta rallies, and from that, you might assume that it’s only a side issue in this presidential campaign.
For some of the biggest players in this election year, nothing could be farther from the truth. For them, cryptocurrency is the issue, bigger than abortion or immigration or whether Mrs. Jones can afford a loaf of bread.
Cryptocurrency, as you probably know by now, refers to any currency system like Bitcoin or Memechain which is not guaranteed by any government but instead is based on the shared agreement that a segment of computer code has as much value as a silver dollar.
Another term worth getting up to speed on fast is DeFi, or decentralized finance, an idea that appeals to many billionaire tech investors who chafe at the financial regulations imposed by governments and banks. Last week, Donald Trump Jr. and Eric Trump revealed that their family is working on a major cryptocurrency platform that will “take on a lot of the banking world.”
“This notion of decentralized finance is obviously very appealing to guys like me who’ve been de-banked or haven’t been able to get insurance or whatnot,” Donald Trump Jr. said.
His father called cryptocurrency “a disaster waiting to happen” when he was president, but over the past four years, influential backers like Elon Musk and Peter Thiele have changed his mind, to the point where Trump received a triumphant welcome recently at the Bitcoin 2024 conference in Nashville.
“We will have regulations, but from now on, the rules will be written by people who love your industry and not people who hate your industry,” he said.
At the top, the cryptocurrency issue is about the threat of money laundering and fraud posed by a completely untethered financial system and the risk of a collapse wiping out the unwary. At the ground level, where it has already emerged as a burning issue in some areas, it’s about the enormous amounts of electricity required to run these systems. What is called the database issue at the local level is, in essence, the cryptocurrency issue. In his Nashville speech, Trump assured his audience that he was with them at that level as well.
“We will be creating so much electricity that you’ll be saying, please, please, president, we don’t want any more electricity,” he said.
The Biden administration’s stance on cryptocurrency has been described as “not unfriendly,” but it has leaned much more toward regulations of the industry. Lobbyists for the crypto industry have reached out to Kamala Harris to voice their concerns about over-regulation, but she has not spelled out a formal policy of her own.
She has reasons for caution. Rich, white and foreign-born players like Musk and Thiele are the face of crypto, but according to Forbes magazine, the percentage of African-Americans who own cryptos is substantially higher than whites. Mark Cuban, a supporter of both Harris and crypto, is among those she has reached out to with questions about the issue.
What’s at stake this year isn’t whether cryptocurrencies will gain a foothold in the economy. Last month, Morgan Stanley announced it would be marketing crypto-based funds, which pretty much settles that argument. What’s at stake is whether crypto-currencies are going to be treated the same as the money we put in banks and thus permitted to be invested in state pension funds and the other big investment pools on which so many depend. And if so, are the institutions that market them going to be regulated in the same way banks are?
A touchstone for this debate is Securities and Exchange Commission chair Gary Gensler, who has described the industry as “rife with fraud, scams, bankruptcies and money laundering” and pursued several crypto-related legal cases. Trump pledged at the Nashville conference to fire Gensler on his first day in office.
What to do about cryptocurrencies is a matter of concern for more than a few billionaires and their attendant speculators. It affects everything from the basic foundations of our economy to the toll that cryptocurrency mining takes on rural Georgia. All of that is on the ballot this year.
