Although it is an election year in the United States, politicians are not new to using hot topics to distract from less favorable media coverage. Cryptocurrencies appear to be one of the latest methods some US lawmakers are using to “wag the dog” over information that could harm them when voters go to the polls in November.
For members of the Republican Party, this could mean making a populist statement against issuing a central bank digital currency (CBDC) or equating cryptocurrencies like Bitcoin (BTC) with financial freedom. Some Democrats may choose to link cryptocurrency transactions to terrorist financing or break with many in the party and come out in favor of digital assets.
Matt Gaetz
On June 18, the U.S. House of Representatives Ethics Committee announced that it would investigate Florida Rep. Matt Gaetz for obstruction charges related to allegations of “sexual misconduct and illegal drug use.” Gaetz has previously supported legislation supporting cryptocurrency regulation, including the Financial Innovation and Technology for the 21st Century (FIT21) Act. However, he has rarely made public statements suggesting that digital assets are central to his position as a lawmaker.
On June 25, Gaetz introduced a bill that would require the IRS to accept Bitcoin payments for U.S. citizens filing their federal tax returns. The Florida state representative said the legislation followed his visit to the inauguration of Salvadoran President Nayib Bukele, saying he wanted to “modernize” the U.S. tax system.
Gaetz is up for re-election in 2024 and will face fellow Republican Aaron Dimock in the August primary and likely Democratic candidate Guy Valimonte in the general election. Neither Dimmock nor Valimont appear to have taken a strongly pro- or anti-cryptocurrency stance at the time of publication.
Donald Trump
In 2022, former US President Donald Trump began walking back his previous statements regarding cryptocurrencies and blockchain while in office. Trump officially announced his re-election campaign and, within weeks, launched a package of non-fungible currencies.
Although Trump has made some statements regarding Bitcoin as he faces potential challengers for the Republican Party’s 2023 presidential nomination, he has begun putting the technology at the center of his campaign in 2024, amid several lawsuits high-profile criminal and civil cases.
In New York, judges ordered the former president to pay hundreds of millions of dollars for defamation and fraud. As a jury prepared to deliberate in his first criminal trial on charges of falsifying business records to conceal a payment to porn star Stormy Daniels, Trump announced that his re-election campaign would accept cryptocurrency contributions.
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The jury ultimately found Trump guilty on 34 counts, and he will be sentenced on July 11. This is the first time in U.S. history that a sitting or former president has been convicted of a crime and faces prison time. Although experts have indicated that it is unlikely that the judge presiding over the case will send Trump to prison immediately after the hearing – assuming he is sentenced to prison at some point – this is not no longer impossible.
These events could help explain why Trump doubled down on cryptocurrencies during an election year. After his conviction, he announced plans to mine all bitcoin in the United States if re-elected, attacked President Joe Biden’s record on cryptocurrencies, and would consider speaking at the Bitcoin conference in 2024 in Nashville.
Joe Biden
The current US president may be no exception to this tactic of spreading information using cryptocurrencies. Although it is unclear at press time whether President Biden’s re-election campaign intends to accept cryptocurrency donations, he reportedly attended a roundtable with congressional leaders to discuss the assets digital and could consider a change of strategy based on Trump’s recent statements.
Unlike Trump, who currently has no governing responsibilities, President Biden has had to answer to lawmakers, the media and the public about decisions about support for Israel, the country’s actions in Gaza and U.S. involvement in defending Ukraine against its Russian military. Domestic issues, including abortion rights, free and fair elections, inflation and immigration, could be at the forefront of many voters’ minds in November.
Public endorsement of digital assets by President Biden would be a major policy shift. The US president vetoed a resolution overturning a US Securities and Exchange Commission (SEC) rule on cryptocurrencies in banking and made statements criticizing the energy consumption of digital assets. However, much of the criticism of the administration is aimed at SEC Chairman Gary Gensler and Democratic Senator Elizabeth Warren.
The Massachusetts senator has made several anti-crypto statements and introduced legislation linking digital assets to illicit finance. Gensler has led the SEC since 2021, leading the regulator to take several enforcement actions against cryptocurrency companies.
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