Can they influence US elections?

With the US midterm elections around the corner, “cryptocurrency voters” are quickly becoming a desirable bloc – and could be on their way to becoming a political force in future elections.

Alongside that is the progress a nascent “crypto lobby” has made on Capitol Hill, spawning a slew of industry associations, political action committees and think tanks that have sprung up in a short period of time, showcasing crypto as a growing player in Washington.

“The crypto industry has realized that it cannot sit idly by while politicians try to regulate digital assets. And politicians have woken up to the fact that they can tap into the potential of a new voter,” said a Washington DC-based political consultant who requested anonymity. TRT world. The consultant also advises a portfolio of crypto firms.

While it’s unlikely to be at the top of most Americans’ kitchen table issues, according to a recent poll, a significant number of registered voters seem to care about crypto-political issues.

The survey, conducted by Global Strategy Group and Fabrizio, Lee & Associates, found that 44 percent of voters across the United States could be described as “crypto voters” — those who own or are considering owning digital assets.

A 17 percent subset of those voters already own crypto, which is “an extremely competitive group of voters that both Democrats and Republicans have turned out in recent elections,” the pollsters said in a statement.

The survey was commissioned by GMI PAC, a crypto-focused group backed by former Trump administration Anthony Scaramucci, which has raised over $10 million since it was formed in January, including $2 million from billionaire Sam Bankman-Fried, founder of crypto exchange FTX .

Perianne Boring, founder and CEO of the Chamber of Digital Commerce, a trade association representing blockchain companies, believes crypto and digital asset policy issues are becoming more popular with mainstream voters because “they align closely with their shared values.”

“Any successful technology or network requires adoption and use by the community, by the people. It’s the demand from people that drives innovation. We definitely see that with blockchain and cryptocurrencies – the people are the network,” Boring said TRT world.

What makes the poll’s findings significant is that there are more voters who have crypto than a membership card in some of the most critical swing states. And if Democrats and Republican operatives figure out how to tap into this new voting bloc and talk to them the right way, they could be in for a treat.

When it comes to party preference, crypto voters trust Democrats (46 percent) more than Republicans (36 percent). This may be because those who own digital assets are generally under 40, a demographic that typically skews Democratic. Despite that, favorable views of crypto are not shaped around bias.

“Both parties are in a battle to connect with younger black and Hispanic males — groups that have proven less calcified in party preferences in recent cycles. These groups also own crypto at much higher prices,” said Bobby Kaple, senior adviser to GMI PAC. “Connecting with them on crypto issues can unlock just enough support to win some of these tight races.”

With Bitcoin and other cryptocurrencies increasing in popularity since the start of the pandemic, millions of people around the world now own digital assets – a market that peaked at $3 trillion before faltering this year, with around 85 million individual wallets for currently active.

While holding a digital asset does not necessarily make a voter part of a particular class, it is more about what that asset represents in terms of feeling.

“Blockchain and digital asset innovations support transparency and privacy, giving wallet owners greater control over their investments. These values ​​of transparency, privacy and control are increasingly important to American voters,” said Boring.

Given the lack of regulatory guidance, a number of candidates have begun running on pro-blockchain tickets to push for crypto-friendly regulation in upcoming Senate races.

U.S. Rep. Ted Budd (R-NC), won his primary bid for an upper house seat in the legislature in June and will face Democrat Cheri Beasley in the November contest. Similarly, Blake Masters, a Peter Thiel-backed Republican, is running against incumbent Democrat Mark Kelly in Arizona.

Budd, a three-term congressman, has introduced or supported a number of crypto-friendly bills during his time in office.

Meanwhile, Ohio is set to elect one of two pro-crypto candidates for its open Senate. Rep. Tim Ryan (D) is a co-sponsor of the Keep Innovation in America Act, a crypto-friendly bill designed to maintain reasonable tax reporting requirements. His challenger, JD Vance, another Thiel-backed Republican and venture capitalist who owns a significant amount of Bitcoin, notably tweeted his vision for Ohio as: “pro-God, pro-family, pro-bitcoin.”

Another well-known figure in the crypto industry, Bruce Fenton, ran for the Republican nomination in New Hampshire before losing his bid last month.

“If the number of crypto-curious voters continues to rise, interest from politicians will inevitably continue to grow,” the DC-based consultant asserted. “Given demographic trends and adoption levels, it wouldn’t surprise me if crypto became a hot topic by the next election cycle.”

Crypto goes to DC

As crypto’s public acceptance has grown, the industry has begun targeting Washington DC the same way its private-sector predecessors did: using lobbying and political campaign contributions to fund lawmakers who could eventually regulate it.

According to the Congressional Lobbying Disclosure database, the number of lobbyists representing crypto has nearly tripled over the past three years, jumping from 115 in 2018 (with $2.2 million spent) to 320 in 2021 (with $9 million spent).

The biggest lobbying spenders in the sector were Coinbase, Ripple Labs and the Blockchain Association, each spending over $2 million between 2018 and 2021.

The Blockchain Association, a group representing over 100 organizations in the industry, just formed its PAC last month with hopes of influencing and funding candidates interested in the crypto industry in future election cycles.

The Blockchain Association PAC’s formation follows a massive surge in crypto lobbying and election funding, with super PACS with ties to the industry investing millions in the 2022 races.

As of July, crypto PACs invested over $31 million in the primaries. According to Roll Call, the industry spent at least $6.8 million lobbying Congress in the second quarter of 2022.

Boring, executive director of the Chamber of Digital Commerce, points out that 70 crypto-related bills were introduced in the last session of Congress, calling it “a big step forward” for the industry and that “the policy ideas and bills we’re seeing being drafted indicate that we’re in good road.”

“It is very difficult to pass legislation, but we know – and policymakers know – that blockchain and digital assets are increasingly important to the US financial markets and economy. It is critical that these important components of the global economy have clarity for industry and certainty for investors, Boring said.

A flurry of crypto-related legislation came on the heels of the Biden administration’s decision to issue an order in March directing agencies to examine the benefits and risks of digital assets — a major milestone for the industry.

In June, bipartisan Senators Cynthia Lummis (R-WY) – dubbed the Senate’s “crypto queen” – and Kirsten Gillibrand (D-NY) introduced the Responsible Financial Innovation Act, the first comprehensive bill to create a regulatory framework for digital assets in the US .

Many analysts believe the legislation will set the tone for how Congress writes the rules for digital assets for years to come. The bill would put the Securities and Exchange Commission’s (SEC) sister agency, the Commodity Futures Trading Commission (CFTC), which currently regulates Bitcoin and Ethereum futures, in charge of the entire crypto market.

If you do, the SEC, which under Chairman Gary Gensler’s reign has drawn ire from the industry for its tough stance on crypto.

For Boring, the industry’s collaboration with policy makers is beginning to promote a “constructive dialogue with regulators”.

“Our top priority is to establish a regulatory framework for our industry that encourages competitiveness while supporting consumer protection,” she added.

Source: TRT World