Regulation
Where Biden’s Top Six Potential Replacements Stand on Crypto
US Vice President Kamala Harris and California Governor Gavin Newsom are two potential replacements… [+] for President Joe Biden if he decides 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 disappointing performance in Thursday night’s debate has Democrats looking to replace him ahead of next month’s nominating convention in Chicago. While the president appears determined to remain at the top of the ticket, at least for now, the focus is now on how his successors might fare in the general election and their policies on critical issues.
A few thousand votes could be decisive, and suddenly crypto becomes a winning election issue for Republicans, including former President Donald Trump. Although Trump has said he is “not a fan“After serving as president of the United States from 2016 to 2020, he reversed course in late May, promising to make the United States a global leader in cryptocurrencies by ending regulatory hostility. Republicans in Congress are also leading efforts to craft crypto-friendly legislation that would pave the way for the $2.4 trillion industry to be broadly assimilated into the U.S. economy.
The policy shift stands in stark contrast to the Biden administration, which has drawn widespread anger from the community. This is largely due to the Security and Exchange Commission (SEC), under Gary Gensler,’s propensity to pursue exchanges and token issuers for alleged violations of 90-year-old federal securities laws, rather than caving to industry demands by creating new cryptocurrency regulations.
“Imagine if there were 20,000 people in Wisconsin who were voting on one issue and were like, ‘You know what? I’m either not going to vote for Joe Biden or I’m going to vote for Trump because he’s pro-crypto,’” says Anthony Scaramucci, a former Trump White House communications director who is now supporting Biden’s reelection campaign.
Additionally, the crypto industry is flexing its muscles more than ever. After bitcoin hit a record price of $74,000 in March, crypto-focused political action committees raised more than $100 million, the third-most 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’ve already defeated anti-crypto candidates in key primaries in New York and California. Those ready-to-spend funds could become even more critical for a Biden replacement who would need to quickly build a campaign war fund.
Neither candidate has responded to Forbes’ inquiries about their cryptocurrency policies since Thursday night’s debate, but here’s a look at their past positions and legislative history with the industry.
Vice President Kamala Harris
Vice President Kamala Harris (Photo by Ethan Miller/Getty Images)
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Vice President Kamala Harris has been tight-lipped about her stance on cryptocurrency regulation, despite hailing from the tech-dominated San Francisco Bay Area. However, should she assume the candidacy (or the presidency, for that matter), it’s reasonable to expect her policies to mimic those of the current president.
The Biden administration has pledged to take a “whole government” approach to regulating crypto, signing an executive order in September 2022 outlining six priorities: consumer and investor protection, financial stability, financial crime, global competitiveness, financial inclusion, and innovation, though most activity so far has focused on SEC enforcement actions. President Biden also recently vetoed a congressional repeal of SEC Staff Accounting Bulletin 121, which essentially banned banks from custody of digital assets like bitcoin and ether on behalf of their 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 Decree to create a framework for licensing cryptocurrency companies in the state. However, he vetoed such a bill in September, just weeks before the FTX crash, saying it was “premature to lock in a licensing structure” and that “a more flexible approach is needed.” The governor was critical by consumer advocates for not acting in time, in response to which he told the Los Angeles Times he didn’t regret his decisions.
Newsom ultimately signed Assembly Bill 39, the Digital Financial Assets Act, 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 called for further refinement, while the DFPI is currently gathering public comment.
California’s law has the potential to compete with New York’s BitLicense regulatory regime, a controversial piece of legislation that is nonetheless the strongest regulatory structure in the country. Bloomberg LawAbout one in four North American cryptocurrency companies are headquartered in California.
Colorado Governor Jared Polis
Colorado Governor Jared Polis (Photo by Jason Connolly/AFP) (Photo by JASON CONNOLLY/AFP via Getty … [+] Images)
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Polis is the most pro-cryptocurrency potential Democratic presidential candidate. The libertarian-leaning Democrat touts cryptocurrency as an example of technological and financial freedom, describing it as an antidote to “big government” at the State Capitol on February 27, 2022, “Blockchain Day.”
Like Trump, Polis has accepted campaign contributions in cryptocurrencies, accepting major tokens like bitcoin and ether and even “memecoins” like dogecoin and shiba inu coin. The state of Colorado also began accepting tax payments in cryptocurrency under his leadership in 2022, though those payments must be done via the Paypal Cryptocurrencies Hub, which converts them into fiat currency before the transaction.
However, most of Polis’ 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 also spoke at the convention of 2020 And 2021In 2022, he also speculated about the possibility of putting the state’s livestock branding registry on the blockchain to make government processes more efficient, transparent, and decentralized. He said the state’s cooperative business laws made it an ideal place to create a decentralized autonomous organization, or DAO. Polis said at the time that he personally does not own any cryptocurrency.
In 2016, while Polis was a member of the House of Representatives, he was a founding member of the Congressional Blockchain Caucus.
Polis hasn’t spoken about cryptocurrency since the FTX collapse.
Illinois Governor JB Pritzker
Illinois Governor JB Pritzker (Photo by Paul Natkin/Getty Images)
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Pritzker has remained relatively quiet on the subject of cryptocurrencies, engaging primarily with the industry 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 has said that “the future of cryptocurrencies is in Illinois.” Like Polis, much of Pritzker’s tech enthusiasm has shifted to supporting the quantum computing industry since 2022.
The Illinois State Financial Protection Agency announced a series of cryptocurrency consumer protection laws in February, but Pritzker has not publicly claimed credit for them. The two-bill package seeks to update financial regulations surrounding the transmission of digital currency, which a press release compares to New York’s BitLicense and California’s proposed licensing structure, and to strengthen enforcement to protect ordinary citizens. Democratic state Rep. Mark Walker and state Sen. 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 to taxpayers by $5 to $90 million by 2027. Environmental group Save Carbon County continued Polis and a cryptocurrency mining company in March for allegedly polluting the environment while receiving $29 million in state tax credits over the past two years.
Pennsylvania Department of Banking and Securities moved to include The department added that the term “cryptocurrency” was used in its definition of “currency” when it oversaw the state’s money transmission law, meaning it has the authority to regulate certain aspects of the state’s cryptocurrency industry. This is a reversal from a 2019 policy in which the department said it did not consider cryptocurrency in its goals. No major regulatory action has yet been taken 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 yet to publicly comment on cryptocurrencies. In December 2019, the last year of Whitmer’s first year in office, four bills were passed to include cryptocurrency and distributed ledgers in the state’s criminal code, allowing the state to prosecute financial crimes. State laws also require a license to transmit money, which includes “funds in an electronic wallet” according to the Ministry of Insurance and Financial Services.