What Biden's Election Means for Bitcoin
7 min read
If you checked United States Presidential candidate Joe Biden’s Twitter account on July 15, you would’ve seen a rather surprising message from the former Vice President, now President-elect. Not only was his account tweeting about Bitcoin, it offered to double any amount sent to the specified account within 30 minutes as a way of “giving back to the community.”
The offer—and the tweet—were the work of hackers who’d broken into Biden’s account, along with those of 130 other prominent public figures, including politicians and celebrities.
I don’t have Bitcoin, and I’ll never ask you to send me any.
But if you want to chip in to help make Donald Trump a one-term President, you can do that here: https://t.co/8XtBjuU5fX
— Joe Biden (@JoeBiden) July 16, 2020
The incident did, however, prompt Biden’s only public statement to date on Bitcoin. The day after the Twitter hack, Biden’s campaign tweeted, “I don’t have Bitcoin, and I’ll never ask you to send me any. But if you want to chip in to help make Donald Trump a one-term President, you can do that here.” Expectedly, the link didn’t accept Bitcoin—just US Dollars.
In truth, the incoming 46th President has no known position on Bitcoin or cryptocurrency. Biden never tweeted about it before the July hack, and an email to his campaign from Decrypt seeking his position yielded no response. A pro-Biden political action committee, Draft Biden 2016, accepted Bitcoin donations back in 2015, although Biden ultimately did not run for president and the PAC was not officially connected to the then-VP.
The outgoing President Donald Trump has tweeted that he is “not a fan of Bitcoin and other cryptocurrencies,” but has largely been hands-off in his handling of digital assets, as the agencies under his command reckon with the impact and influence of crypto on their respective fields.
One could argue that Biden has plenty of other issues piling up on the Resolute desk as he moves ahead with his transition plans, from the coronavirus pandemic to the state of the economy and Trump’s record on both domestic and international politics.
Still, Biden’s term in office could have a significant impact on cryptocurrency as the industry continues to grow and mature in the US and the world at large. Here’s a look at what Biden’s potential cabinet members think of cryptocurrency, as well as perspective from multiple crypto industry leaders that Decrypt spoke with.
Biden’s crypto cabinet?
Biden’s Vice President-elect, Kamala Harris, current US Senator and former Attorney General of California, has not publicly shared her take on Bitcoin and cryptocurrency. However, her team features Ryan Montoya, the former Chief Technical Officer of the Sacramento Kings, which is known as the NBA’s most tech-forward and crypto-friendly team. He is Harris’ Director of Scheduling and Advance, and will have the ear of the VP.
Beyond that, Harris has won the praise of at least one prominent crypto luminary who believes she could be hip to Bitcoin. Investor Tim Draper told CoinTelegraph in August that he’s seen her in action in California politics and thinks she could ultimately understand and see the potential in crypto. “I think she has a good head on her shoulders, so she can learn crypto,” said Draper. “We should get her a Bitcoin wallet if she doesn’t already have one.”
Former Democratic presidential hopeful Andrew Yang is undoubtedly the most Bitcoin-friendly member of the Biden campaign team. Yang, who ran on a platform of universal basic income for Americans, is an entrepreneur with forward-thinking ideas on blockchain technology and cryptocurrency. As a candidate, for example, he proposed implementing a blockchain-based voting system once elected president. And after dropping out of the Presidential race, he launched a non-profit, Humanity Forward, to promote crypto-adjacent ideas such as UBI and the “data dividend.”
We just launched in front of millions on @TheView! If you think it’s time for a human-centered America, donate today. https://t.co/CAyumCLkNc pic.twitter.com/eeVmeVgfiu
— Humanity Forward (@HumanityForward) March 5, 2020
Yang also wrote about the government’s inability to properly reckon with the rapid advancement of cryptocurrency. If Yang takes a role in the Biden administration, he could be a leading voice in developing sensible, standardized regulation for crypto assets.
“Cryptocurrencies and digital assets have quickly grown to represent a large amount of value and economic activity, outstripping government’s response,” he wrote in November 2019. “A national framework for regulating these assets has failed to emerge, with several federal agencies claiming conflicting jurisdictions.”
Fellow former presidential candidate, Senator Elizabeth Warren, has been pegged by some as a potential Treasury Secretary in the Biden administration. Warren is known for being highly critical of Wall Street excess and helped create the Consumer Financial Protection Bureau under the Obama administration. Warren’s public comments on crypto have largely focused on the potential for average consumers to be scammed by shady ICOs or to not fully understand what they’re buying. “I’m worried about consumers getting hurt,” she told Yahoo! Finance in 2018.
Facebook has too much power and a terrible track record when it comes to protecting our private information. We need to hold them accountable—not give them the chance to access even more user data. #BreakUpBigTech https://t.co/eQr06VMMyx
— Elizabeth Warren (@ewarren) June 19, 2019
During a 2018 Senate hearing, she said, “The challenge is how to nurture productive aspects of crypto with protecting consumers.” Additionally, following the announcement of a Senate hearing about Facebook’s Libra stablecoin plans, Warren tweeted: “Facebook has too much power and a terrible track record when it comes to protecting our private information. We need to hold them accountable—not give them the chance to access even more user data. #BreakUpBigTech.”
According to a report from the Wall Street Journal, Biden is reportedly considering Gary Gensler, former chairman of the Commodity Futures Trading Commission under Obama, to advise on tackling Wall Street Oversight.
Gensler would bring a wealth of expertise with blockchain and crypto to the Biden administration, having taught a course at MIT about the use of Bitcoin and blockchain in finance. In a CoinDesk op-ed written last December, he described Bitcoin as a “catalyst for change,” while noting that crypto exchanges have “not yet [been] appropriately brought within public policy frameworks,” and highlighting that crypto markets have been “rife with scams, fraud, hacks and manipulation.”
Ramping up cryptocurrency regulation?
Lael Brainard, the current Federal Reserve Governor, is another name that has been floated as a potential Treasury Secretary in the Biden administration. Drew Hinkes, a blockchain-focused attorney at Carlton Fields, tells Decrypt that her appointment could be beneficial for crypto.
“[That] would probably be positive for the crypto industry given her familiarity with blockchain technology and interest in central bank digital currencies,” he said. “A new administration may fill some of the many open positions at various regulatory agencies which have remained vacant for most of the current administration. This may be a dual-edged sword—on one hand, this may facilitate enforcement. However, it may also facilitate policy creation. With more resources, we could see more no-action relief, and more approval of crypto instrument issuances.”
CoinTracker co-founder Chandan Lodha notes that Biden’s proposed tax plan would affect crypto holders earning $400,000 or more per year, and especially those making $1 million or more.
“Biden’s tax plan calls for increasing taxes on those making $400,000 or more per year. The most direct impact on cryptocurrency would be for those in this high-income bracket, who could see their ordinary income tax rate increase from 37% to 39.6% (for short term crypto capital gains) and see all capital gains taxed at 39.6% on income over $1M + repeal of step-up in basis for inherited cryptocurrency,” Lodha told Decrypt. “Essentially, most crypto users wouldn’t see a difference, those making over $400,000 per year could see a slight increase in taxes on their crypto, and those making over $1M per year could see significant increases in their crypto taxes.”
Shyft Network co-founder Juan Aja Aguinaco tells Decrypt that Biden’s ability to impact cryptocurrency as president would depend on several factors, including whether or not Democrats win control of the Senate—still up in the air pending the outcome of two runoff elections in Georgia—not to mention the composition of the Supreme Court. Even so, he believes that the Biden administration could be crypto-positive, albeit more hands-on than Trump has been, and noted some prominent Democrats in favor of regulation.
“Should Biden enjoy the support of the majority of both houses, it would be likely that he may ease up on the hard stance taken by the Trump administration. He may go for a more exploratory approach, and enable the development of blockchain-based solutions,” he said.
He noted that historically, Democrats have tended to be more protective of end-users, citing Maxine Waters’ request that Facebook pause development and deployment of Libra until Congress could better understand the implications for them. “DeFi and its volatile growth may become targets of future end-user/investor protection or regulation,” Aguinaco continued.
“Alexandria Ocasio-Cortez, a prominent presence and influence in the party, also spoke against corporate-controlled currencies and showed favor for centrally-managed money. While her statement is more targeted at stablecoins, I wouldn’t be surprised if the representatives from the Democratic party take a more protective stance, and not a hands-off approach.”
