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Updated Jun 5, 2024, 11:30pm EDT
politics

Why Congress’s No. 1 crypto fan is feeling so good about 2024

REUTERS/Amanda Andrade-Rhoades
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THE INTERVIEW

For years now, Rep. Tom Emmer has been Congress’s Mr. Crypto — a man colleagues have described as the “OG” of Capitol Hill’s blockchain enthusiasts. And with five months to go before the 2024 election, he couldn’t be more excited about how the race is shaping up for the industry he’s long championed.

“I think people are going to recognize after this election is over, that the time has come,” the House majority whip from Minnesota recently told Semafor in an interview. “And under the next administration, I think you’ll see some actual crypto-friendly, stablecoin-friendly, digital asset-friendly laws being put on the books.”

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Kadia’s view

Emmer, his chamber’s third-ranking Republican, has lots of reasons for his optimism. After some initial ambivalence, the GOP has become an increasingly down-the-line pro-crypto party, while Democrats have remained split on the issue. This month, House Republicans and 71 Democrats passed the first comprehensive regulatory scheme for crypto — the Financial Innovation and Technology for the 21st Century Act — with rules that were widely seen as friendly to the industry.

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Perhaps nobody symbolizes that evolution more than Donald Trump, a former crypto skeptic who described currencies like bitcoin and ethereum as a “disaster waiting to happen.” This year, the once and possibly future president has become a convert to the industry’s cause, and begun accepting campaign donations in digital currencies. “If you like crypto in any form, and it comes in a lot of different forms, you better vote for Trump,” he told a crowd in March.

Joe Biden, in contrast, has opposed the House regulatory bill as too lenient and recently vetoed an attempt by Congress to roll back a Securities and Exchange Commission rule on crypto.

Emmer declined to say whether he has spoken about crypto issues with Trump, but said the candidate “recognizes that people want leadership on this issue, and he is stepping into it in a big way.” He argues Republicans are increasingly in position to win over a “huge group” of 18-to-40-year-old single-issue crypto voters who “do not trust people in Washington, D.C. who are trying to tell them what they can and can’t do” with their money.

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“You need to give [former GOP candidate] Vivek Ramaswamy some credit for bringing out this whole new young electorate that were very excited about his knowledge of the digital asset space,” he says. While there are a number of prominent pro-crypto Democrats, Emmer argues that lawmakers like Sen. Elizabeth Warren and SEC Chair Gary Gensler “have completely messed this thing up” for the party by seeking stiffer regulations.

Crypto firms are hoping to send the same message. They’ve put out polling suggesting large numbers of voters will weigh candidates’ positions on crypto, which Anthony Scaramucci and Blockchain Association President Kristin Smith recently argued could put Trump “over the top.” More importantly: It’s stacking up a war chest. The pro-crypto Fairshake super PAC has so far received $160 million, including a recent $25 million donation from cryptocurrency exchange operator Coinbase.

Fairshake and other super PACs have already spent big in primary races, helping to defeat Democratic Rep. Katie Porter’s California Senate bid. Some expect them to attack at-risk Senate Democrats like Jon Tester, who described crypto as “bullshit,” and Ohio’s Sherrod Brown, the Senate Banking Committee chair known as a crypto skeptic. Tester’s Republican opponent, Tim Sheehy, has already attacked him on X over the issue, calling Crypto “the future of finance and the internet, and thousands of jobs for America.”

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Know More

The recent House bill offers a picture of what a GOP-led crypto agenda might look like. The legislation would set up a basic regulatory framework that would generally treat digital currencies and assets as commodities instead of securities, which critics such as Warren and Gensler have argued would lead to dangerously lax oversight. Emmer and industry supporters argue that Congress needs to set basic “rules of the road” to prevent financial disasters, but that more strictly regulating the industry would choke off innovations.

“Elizabeth Warren should not be given any time on this issue because all she ever says is no. She wants central, top-down control. That’s gone,” Emmer said. “There’s a way that we can do this with Congress, if we do our job, to make sure you protect what we have and you allow it to improve at the same time.

At the same time, he and other Republicans have proposed a host of more targeted bills, including a measure regulating stablecoins — cryptocurrencies backed by dollars or other assets. Emmer has pushed his own proposal to ban the Federal Reserve from developing a “central bank digital currency,” an idea many other countries have begun to experiment with, but that he argues could lead to Chinese-style surveillance of Americans’ finances.

Emmer himself became interested in Crypto issues more than a decade ago after being slipped a book titled “The Age of Cryptocurrency” by an aide, and has been among the industry’s fiercest defenders in Washington through its booms, busts, and occasional spectacular frauds, despite not owning any of the coins himself in order to avoid a conflict of interest. He supports the cause, he said, because it ties into “liberty,” entrepreneurship, and innovation on the web. But he also told Semafor that he expected the crypto world’s financial muscle would quickly win it more sway on Capitol hill.

“Members of Congress, Republicans, Democrats tend to be very self-focused and selfish about raising resources,” he said. “And those that don’t understand this area when they see what people can raise if you’re actually working with the industry, they’re gonna want to learn about it.”

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Room for Disagreement

Aside from industry-funded polls, there isn’t much evidence yet that there is a large contingent of single-issue crypto voters who could make or break the election. Americans are generally wary of the sector: In 2023, 75% of adults who’d heard about cryptocurrencies weren’t confident of their safety or reliability, according to Pew.

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Notable

  • Last month, Politico reported on how Donald Trump planned to use crypto as a wedge issue against Biden.
  • Anthony Scaramucci and Kristin Smith of the Blockchain Association warn Democrats that they need to change their views on crypto or risk alienating an influential bloc.
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