Analysis: Is Biden’s bid to woo crypto industry ‘too little, too late’?

on May 30, 2024
  • President Biden’s re-election campaign engages with the crypto industry, reflecting a shift in stance.
  • The potential SEC approval of spot ether ETFs and bipartisan legislative support signal a acceptance.
  • Industry reactions to Biden's outreach are mixed, highlighting the complexities of aligning crypto policy.

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President Joe Biden’s re-election campaign has initiated outreach to cryptocurrency industry players, seeking guidance on future crypto policy, according to reports.

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This move marks a significant shift from Biden’s previously distant approach towards the industry, reflecting a growing recognition of the impact crypto-related issues could have on the upcoming presidential race.

Biden campaign engages with crypto experts

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The engagement effort, which began about two weeks ago, highlights a strategic pivot by Biden’s team as they navigate a potentially close re-election bid.

Several reports noted that the campaign has reached out to crypto experts, including industry figures previously rebuffed by Biden.

This outreach aims to understand the crypto community’s perspectives and shape policies that could resonate with a broader voter base.

Trump embraces digital assets

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The Biden campaign’s engagement with the crypto community comes in the wake of the Trump campaign’s recent pro-crypto stance.

On May 21, the Trump campaign announced it would accept cryptocurrency donations, a notable departure from former President Donald Trump’s earlier criticisms of digital currencies.

Trump’s remarks at the 2024 Libertarian national convention further underscored his evolving view, as he voiced support for cryptocurrencies and opposition to Central Bank Digital Currencies (CBDCs).

Biden’s shifting stance on crypto

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The Biden administration’s recent overtures to the crypto sector signify a potential softening of its stance, despite a previous “whole-of-government” approach against the industry. This shift is influenced by several key developments:

Potential SEC approval of spot ETH ETFs: The U.S. Securities and Exchange Commission (SEC) is reportedly considering approving spot ether exchange-traded funds (ETFs).

This move, if realized, would mark a significant reversal for an asset class previously viewed with skepticism.

The SEC’s request for amended filings from prospective ETH ETF exchanges on an expedited basis suggests a positive outlook.

Bloomberg Intelligence has increased the likelihood of SEC approval from 25% to 75%, indicating strong institutional interest in Ethereum.

Legislative support for blockchain technology: The recent passage of the Deploying American Blockchains Act of 2023 by the House of Representatives with a margin of 334 to 79 highlights growing bipartisan support for the blockchain industry.

This bill empowers the Secretary of Commerce to promote U.S. competitiveness in blockchain technology, signaling a legislative shift towards embracing digital innovation.

FIT21 Act awaiting Senate approval: The Financial Innovation and Technology for the 21st Century Act (FIT21), deemed the most significant crypto-specific legislation, is poised for a Senate vote.

House Democratic leaders, while opposing the bill, have not actively discouraged members from supporting it, indicating a nuanced approach to crypto regulation.

Crypto industry has a mixed response to Biden

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The Biden campaign’s outreach has been met with a mixed response from the crypto industry.

While many view the engagement positively, some remain skeptical, perceiving it as “too little, too late.”

Nevertheless, the administration’s efforts to align with the evolving regulatory landscape and industry dynamics could play a crucial role in shaping voter sentiment ahead of the 2024 elections.

The potential SEC approval of spot ETH ETFs and the passage of supportive blockchain legislation underscore a broader trend towards integrating digital assets into the financial mainstream.

For Biden’s re-election campaign, effectively navigating these developments and addressing the crypto community’s concerns could prove pivotal in a tightly contested race.

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