Over the last four years, President Joe Biden has demonstrated a clear reluctance to support the Bitcoin and cryptocurrency industry, as recently evidenced by his veto of significant legislation and the broader stance of his administration. On May 31, Biden vetoed a pivotal bill that would have allowed highly trusted financial institutions to custody Bitcoin and other cryptocurrencies.
BREAKING: 🇺🇸 President Biden vetoes bill that would allow highly regulated financial firms to custody #Bitcoin and crypto. pic.twitter.com/TMHavdWRx7
— Bitcoin Magazine (@BitcoinMagazine) May 31, 2024
The legislation in question had garnered bipartisan support in both the House and Senate. It aimed to provide a regulatory framework that would enable banks and other financial entities to securely hold digital assets, thereby further integrating Bitcoin into the mainstream financial system. Proponents of the bill argued that such a framework would enhance security of spot Bitcoin ETF funds by distributing the honeypot of coins currently held by only a couple institutions, promote innovation, and help facilitate the growth of the Bitcoin industry. However, Biden’s veto reflects his administration’s lack of support for the industry, where the President previously compared crypto traders to “wealthy tax evaders”.
The Biden Administration also published a report attacking Bitcoin and Proof of Work mining, promoting a Central Bank Digital Currency (CBDC) instead, stating “A U.S. CBDC would have the potential to offer significant benefits”. Biden wanting to embrace a CBDC, which would allow the Federal government to have complete control over their citizens finances, further shows his true colors and reasoning for not supporting Bitcoin.
Recently, Joe Biden’s Department of Justice arrested the founders of popular privacy focused Bitcoin mixing service, Samourai Wallet, and charged them with money laundering. U.S. Senator Cynthia Lummis defended the Samourai founders, stating that “this stance contradicts existing Treasury guidance, common sense, and violates the rule of law.” Renowned whistleblower Edward Snowden also commented on the arrest:
NEW: Edward Snowden on the U.S. Department of Justice arresting #Bitcoin mixing service Samourai Wallet founders and CEO pic.twitter.com/qmigHJzmZU
— Bitcoin Magazine (@BitcoinMagazine) April 24, 2024
In addition, the Democratic Party in general has also shown a reluctance to support pro-Bitcoin legislation. Key figures like Senator Elizabeth Warren have been particularly vocal in their opposition to the crypto industry. Warren has often criticized cryptocurrencies for their environmental impact and regulatory challenges, and infamously stated that she is “building an anti-crypto army” to address what she perceives as the industry’s threats to financial stability and consumer protection.
In stark contrast, former President Donald Trump has recently embraced Bitcoin and cryptocurrencies. On June 1, 2024, Trump announced that his campaign would accept Bitcoin payments through the Lightning Network, facilitated by OpenNode, a Bitcoin and Lightning Network infrastructure provider. Trump has recently said that he “will ensure that the future of crypto and Bitcoin will be made in the USA…I will support the right to self custody to the nations 50 million crypto holders”. Trump has also recently stated that he is “very positive and open minded to crypto companies,” and that “Our country must be the leader in the field. There is no second place.”
Despite the Democrats’ stance, the Bitcoin industry is becoming an increasingly influential force in U.S. politics. Recent polls indicate that crypto voters are largely nonpartisan, with no significant leaning towards either the Republican or Democratic parties. This demographic represents a substantial and growing portion of the electorate, with over 50 million Bitcoin and crypto holders in the United States. As the 2024 Presidential election approaches, Bitcoin policy is emerging as a critical issue for candidates to address.
The evolving stance of political leaders on Bitcoin and cryptocurrencies underscores the growing importance of these assets in shaping economic and regulatory policies. For Biden, his reluctance to embrace Bitcoin is alienating a significant segment of the voter base. Crypto advocates argue that clear regulatory frameworks and mainstream acceptance of Bitcoin would drive economic growth, foster innovation, and enhance financial inclusion. However, the Biden administration’s focus remains on preventing that from happening.
The rise of Bitcoin has introduced new dynamics into the political landscape. While Bitcoin operates in a nonpartisan manner, appealing to individuals across the political spectrum, this does not mean all politicians will embrace it. Joe Biden and the Democrats are turning a non-partisan technology into a partisan issue.
In conclusion, the Biden administration and majority of Democrats favor a CBDC over a decentralized cryptocurrency like Bitcoin. A CBDC aligns more with Biden and the Democrats than Bitcoin, as Bitcoin is less appealing to them because it does not help them achieve their aspiring authoritarian goals.
As the 2024 Presidential election looms, the role of Bitcoin policy in shaping voter preferences and political strategies is becoming increasingly evident. With over 50 million Bitcoin and crypto holders in the United States, the decisions of political leaders on digital assets will likely play a pivotal role in the upcoming election, reflecting the growing significance of Bitcoin in the broader economic and political landscape.
