2020 Elections: What’s at stake for the cryptocurrency industry

The 2020 U.S. presidential election will shape crypto politics for the next four years, although no one is actually proposing specific positions for cryptocurrencies.

While the presidential candidates aren’t campaigning on their blockchain expert – and, in fact, they just mentioned cryptocurrency – the people they appoint to lead and serve in federal agencies, will shape the agenda on issues ranging from digital currencies. of the central bank to the legal status of various tokens.

The election is important, said Kristin Smith, executive director of the Blockchain Association, a group of industry lobbyists. “We have important regulatory issues, important legislative issues [and] the people who will be there will play a huge role in this. “

However, it is clear that neither of the two top US presidential candidates is proposing immediately applicable policies. John Collins, a partner of the FS Vector advisory group, told CoinDesk that “cryptocurrencies will only be low in priority, which is not surprising.”

In the ballot this year are President Donald Trump (R), former Vice President Joe Biden (D), Jo Jorgenson (Libertarian Party), crypto entrepreneur Brock Pierce (independent) and musician Kanye West (also independent) . Most polls agree that the race is between Trump and Biden, with some of the third-party candidates not even making it to all 50 votes.

Trump has publicly beaten bitcoin, tweeting that he is “not a fan” of cryptocurrency. Biden hasn’t made any public statements on the matter, although his campaign joked wouldn’t ask for bitcoin donations after his Twitter account was hacked in July along with numerous other cryptocurrency exchanges, influencers, and media sites.

Neither candidate has made cryptocurrency and blockchain a campaign problem.

The most direct impact of the election on crypto politics will likely come from the federal regulators the president appoints and the Senate confirms. The presidents of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the head of the Office of the Comptroller of the Currency (OCC), and the secretaries of the Treasury and State are just some of the people who shape the United States the government’s approach to cryptocurrencies.

Currently, the SEC is run by President Jay Clayton, whom Trump has appointed United States Attorney for the Southern District of New York. In the event that Trump wins and Clayton is confirmed as head of the prosecutor’s office, Commissioner Hester Peirce could potentially take control of the securities regulator, at least temporarily.

This would be a big deal. Peirce has in the past advocated for cryptocurrency development and regulatory indulgence, earning the nickname “Crypto Mom” ​​for her positions, which include a safe haven designed to get token projects off the ground before facing regulatory burdens.

It’s unclear who Biden might tap to lead the agency if he wins the election, but Democratic commissioners Caroline Crenshaw and Allison Herren Lee are potential candidates, at least initially.

Ron Hammond, an industry lobbyist and former assistant to Rep. Warren Davidson (R-Ohio) expects the agency to take further law enforcement next year, particularly if Biden wins.

“There is a lot of law enforcement personnel who want to make sure they get a job later [year] regardless of who wins, “he said.” They want to prove they’re engaged and don’t sleep behind the wheel. ”

Read more: ‘Inherently Borderless’: Acting OCC Chief Talks Crypto, State Licenses and DeFi

Overall, the securities regulator appears to be more inclined to “regulation by application” rather than to developing clear frameworks, he said.

The CFTC is more likely to create these regulatory frameworks, and current President Heath Tarbert only took office in 2019, giving him a few more years to head up the commodity regulator.

The management of the OCC, which has made a series of waves since current Acting Comptroller Brian Brooks took office, is more unclear, he said.

“I haven’t heard any names, Republican or Democrat,” he said.

Whether or not the US issues its own central bank digital currency is another open question. The Federal Reserve indicated that it is researching several technologies that could support a digital dollar, with Boston Fed Governor Lael Brainard discussing the matter in a speech earlier this year. Brainard is also rumored to be Biden’s first choice for Secretary of the Treasury.

On the other hand, it is unclear whether current Treasury Secretary Steven Mnuchin will remain in Trump’s victory, although Hammond believes Fed Chairman Jerome Powell will likely continue in the event of Trump’s victory.

Not everyone, of course, thinks the elections will bring big changes to the cryptocurrency industry.

“I think no matter who wins this election, I don’t see that there is a huge difference in terms of cryptocurrency regulation,” said John Sedunov, assistant professor of finance at Villanova University’s School of Business.

In his view, regulators are very likely to continue to treat cryptocurrencies as they already have: as a financial asset.

“As far as technology, Big Tech, financial regulation, I think in a Biden administration it’s pretty clear that there would be more control over financial or banking institutions,” he said. “But I don’t think anyone in the crypto space right now needs to worry about being considered ‘too big to fail’.”

Smith noted that a potential Biden administration is “mostly unknown,” while a second term Trump may be more familiar to the crypto space.

The next president could also help set the tone for crypto-adjacent issues like data privacy, antitrust / big tech, and consumer protection.

Read more: DOJ’s Crypto Framework is a “complete disaster” for digital privacy rights

Current Attorney General William Barr has come out against cryptography both in a cryptocurrency enforcement framework and through a statement made with other intelligence agencies. It is unclear whether a Biden candidate for the role would have similar views.

However, consumer protection is more likely to be an issue Biden’s team would pay attention to, Sedunov said.

“I think the crypto space and crypto space participants the best bet in thinking of a potential Biden win is to sell people the idea that this is pro-consumer and healthy for the economy,” he said.

Existing rules or guidelines are unlikely to be overturned immediately should Biden win, Collins said, at least in part because it won’t be a major priority.

What seems likely is that the future administration will likely have more staff members who come from a cryptocurrency-related background, he said.

Given the growing interest of European and Asian regulators in central bank digital currencies and other blockchain rules, with China in particular moving quickly to develop a digital yuan, the next administration is likely to have to work harder in this area. , Collins said.

“I don’t think the federal government will give people bitcoins, but the idea of ​​more open and reliable payment networks will be a big part of the conversation,” he said.

While the president could set the tone for cryptocurrency regulation next year, much of the government’s approach will be decided by Congress. The House of Representatives is expected to remain in the hands of the Democratic Party, and according to statistical analysis site FiveThirtyEight, Democrats are currently favored to win the Senate.

That means the Senate Banking Commission will change heads, with Senator Sherrod Brown (D-Ohio) expected to take the reins of the committee, Hammond said.

Collins said he could see both Democrats and Republicans agree on certain spot market regulations and which agency should be responsible for them.

Smith said she expects to see more lawmakers start looking at cryptocurrencies next year.

“On the part of the Senate, just in the last couple of months we have had a couple of Senate offices that have approached us and said this is a priority next year and they want to start a dialogue.”