Crypto has been highly visible in this election cycle thanks to polls and political action committees. This is a new and unaccustomed role for it with unknown results.
The 2022 midterm elections will be held in the United States on Nov. 8. Thirty-four senators and all 435 members of the House of Representatives will be running. According to media reports, cryptocurrency lobbyists and political action committees have poured millions of dollars into select campaigns, and extensive polling has shown crypto to be on voters’ minds.
Fundraising and polling are normal parts of the American political system, but the numbers associated with crypto may have raised some eyebrows. Sam Bankman-Fried called $1 billion his “soft ceiling” for 2022 election contributions, for example. Even though he backpedaled on some of his intentions, he remains the sixth-largest donor in this election cycle. There are numerous crypto-related political action committees as well. According to Bloomberg, as of Oct. 19, crypto-affiliated donors had spent more than donors to such traditional recipients as defense and big pharma.
A poll commissioned by Grayscale between Oct. 6 and Oct. 11 shows that 38% of voters surveyed will be “considering crypto policy positions.” A poll commissioned by the Crypto Council for Innovation at roughly the same time showed that 45% of voters “want legislators to treat crypto as a serious and valid part of the economy.”
Why all the excitement?
Crypto is making continual inroads into daily life, even in the current unfavorable market conditions. Nonetheless, someone with some distance from the industry may be surprised to hear that 45% of potential American voters have any opinion about crypto at all.
But, 40 million Americans own crypto, and they take it personally, Cornell Law School faculty member and Foley & Lardner partner Patrick Daugherty told Cointelegraph:
“Does ‘crypto policy’ resonate with voters as much as inflation and other headline news? Probably not, but then again many voters are buying crypto as a hedge against inflation.”
Furthermore, “Crypto is the future of money, which is important to every American,” Daugherty said.
Martin Dobelle, one of the three co-founders of political software company Engage, agreed. “The average person cares more about this issue than you might expect,” he said. Dobelle attributed voter interest in crypto to a generally positive attitude toward technology, especially among the young. He told Cointelegraph:
“Voters are very pro-technology, pro-innovation and they […] might not know the specifics of crypto legislation or tech legislation writ large, but they do have kind of an intuitive sense of […] what policy thinking that moves in the direction of embracing technology and innovation would look like.”
Engage is a public benefit corporation with a mission to increase public participation in the political process. Among its activities, Engage raises funds in cryptocurrency for 16 pro-crypto candidates.
What are we doing here?
The next logical question is what crypto voters will accomplish. Pro-crypto House members like Minnesota Republican Tom Emmer and Oregon Democrat Ron Wyden expect to win their races easily, while Ohio Democrat Tim Ryan is facing off against equally pro-crypto Republican JD Vance. Not only that, the crypto regulation situation is relatively under control, with bills already in the House and Senate.
Hogan Lovells partner Aaron Cutler saw a limited connection between the election and upcoming crypto regulation. “I don’t think it’s a question of political support, but more a question of policy priorities,” he said, adding:
“This is one of the reasons we saw certain legislation introduced this Congress — not because it was going to be passed and enacted into law, but because Members want to show leadership and stake out a bit of legislative turf.”
On the other hand, seeing that existing bills come up for voting faster is probably one of the effects greater political support would have.
The other effect of voting is keeping some candidates out of office. Attacks against crypto are perceived by many American voters “as threats to economic security and personal liberty,” Daugherty said.
1/ Starting today, Coinbase will begin integrating our crypto policy efforts right into our app. These will help our 103M verified users get educated on the crypto positions held by political leaders where they live. pic.twitter.com/3GqWZIioZQ
— Brian Armstrong (@brian_armstrong) September 14, 2022
Willamette University law professor Rohan Grey was having none of the single-issue votings. Pollsters “aren’t saying that they [pro-crypto candidates] are good people,” he said. Grey saw voting as important as an action. “Give the impression of people coming to your cool party,” he said.
To Dobelle, the increase in political activity surrounding crypto was significant as a sign that crypto is moving into the middle of the political spectrum, which he said is “past due.”
Whose party is it?
The bipartisan/nonpartisan nature of crypto is often commented on, but there are clear divisions in the crypto world. First, crypto skews right. This can be seen, among other places, in the Crypto Action Network politicians’ scorecards. That organization has graded 144 U.S. legislators on their crypto support. (The remaining nearly 400 lawmakers presumably have no record of crypto.) The scorecards gave Republicans an average grade of 3.4 out of 4, converted from A-F marks, while Democrats received an average of 2.1.
Bipartisanship legislation is full of “sensible compromises,” according to Daugherty, and has a better chance of passing in the current polarized environment. Cutler concurred, although he added that his firm foresees “Republican-led committee oversight and investigations of agencies with jurisdiction over digital assets and cryptocurrency.”
Grey, an adherent of Modern Monetary Policy, had a simple explanation for crypto’s right leanings based on its origins in libertarian economics and the Cypherpunks:
“The problem being solved by crypto is an inherently right-wing one.”
Grey saw one only result from any foreseeable election outcome: Crypto’s “handover to big business.”
Whether those claims are accepted or not, they point to an old, basic dichotomy: Crypto as the Wild West — alternative and unregulated money — and crypto regulated and integrated into the economic mainstream. In this light, the 2022 midterm elections are a rehash of a familiar trope and some slight movement toward its resolution.
Digital Chamber of Commerce vice president of policy Cody Carbone wrote in one of his many tweets, “Crypto has not yet become a mainstream part of candidate platforms. Given user adoption trends, that WILL change for the 2024 election. It’s up to voters and industry, to make sure our voices are heard.”