The Republican Party is quickly becoming a champion of cryptocurrency. That could be bad news for Democrats.
In the most recent development, Republican Senator Cynthia Lummis of Wyoming unveiled the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” – a.k.a., the BITCOIN Act. The bill appears to be the first legislative effort toward the U.S. government becoming an active holder of cryptocurrency.
Lummis’s bill would specifically require the federal government to purchase 200,000 units of Bitcoin over the course of five years, along with “affirm[ing] self-custody rights of private Bitcoin holders and emphasiz[ing] that the strategic Bitcoin reserve shall not infringe upon individual financial freedoms.” In a statement, Lummis described the bill as a “Louisiana Purchase moment that will help us reach the next financial frontier” and called on Congress to “take bold steps to create a brighter future for generations to come by creating a strategic Bitcoin reserve.”
Notably, the Bitcoin would be acquired by “diversifying existing funds within the Federal Reserve System and Treasury Department,” and not through any new taxes or deficit spending. If the United States indeed acquires one million Bitcoin, it would represent about five percent of the 21 million total Bitcoin units in circulation – roughly equivalent to the fraction of the world’s gold reserves held by the U.S. government.
The concept of a Bitcoin reserve has generated some buzz in recent years as cryptocurrency has continued to revolutionize the global financial system. Unlike government-owned currency, or “fiat money,” cryptocurrencies, of which Bitcoin is the most prominent, are typically issued and managed by decentralized networks of computers using blockchain technology.
This means that governments cannot control the supply of crypto – making them, in theory, a safe haven from inflationary policies like those that have rocked the U.S. economy over the past four years. The value of cryptocurrency is determined solely by supply and demand in the market, as well as the perceived utility and trust in the technology – something which could increase dramatically if the U.S. government begins purchasing Bitcoin.
As a relatively new issue (Bitcoin was just created in 2009) cryptocurrency has so far created some unlikely political rivalries and alliances, with Republicans and Democrats falling on both sides of questions surrounding the regulation and taxation of the technology. But former President Donald Trump, recognizing the potentially revolutionary nature of cryptocurrency to the future of the global economy, has charted a course that other Republicans are increasingly fallen in line behind.
That course includes making cryptocurrency an important part of his re-election agenda and promising to protect the independence of crypto markets from government interference.
In July, Trump spoke at Bitcoin 2024, a national cryptocurrency conference. Along with promising to build a “strategic national Bitcoin stockpile,” Trump pledged to fire Biden SEC Chairman Gary Gensler, who has been openly hostile toward the crypto industry, and to “keep 100 percent of all the Bitcoin the U.S. government currently holds or acquires.”
“If crypto is going to define the future, I want [it] to be mined, minted, and made in the U.S.A.,” Trump told Bitcoin enthusiasts in attendance. “If Bitcoin is going to the moon … I want America to be the nation that leads the way.”
Trump’s leadership on the issue appears to have helped him make inroads in the tech community – a constituency that Democrats have had a virtual monopoly on until very recently. Multiple mainstream publications noted that the Bitcoin conference was filled with attendees wearing pro-Trump clothing. Several individuals were wearing “Trump Save America” shirts, and scores of attendees were wearing the iconic red MAGA hat. A Bloomberg article derisively called it a “MAGA-filled Crypto lovefest.” According to The Verge, “hours before Trump was scheduled to speak, the lines filled out the door and around the block.”
A number of noteworthy tech business leaders have also recently offered their public support for Trump, listing his stance on crypto as one reason why. Late last month, tech billionaire David Marcus announced that he was endorsing Trump for the 2024 election, describing his political evolution from Democrat to Republican as a “gradual political 180” over several years. Marcus is notably the creator of the Libra cryptocurrency, which received significant backing from Facebook. “I believe we need a President who is unequivocally pro: America, the Constitution, business, Bitcoin/crypto, innovation, Israel, small government, legal immigration, free speech, meritocracy, and common sense,” Marcus stated.
The sudden surge of support for Trump among the crypto community has touched off an intra-party squabble within the Democrat Party. While the smart move from a political standpoint would clearly be for Democrats to mimic Trump’s approach and promise to empower the crypto industry by getting government out of the way, the left’s affinity for blanketing everything in layers of regulatory red tape is proving a difficult habit to break. Many Democrats, such as Senator Elizabeth Warren of Massachusetts, are urging Kamala Harris to take a tough stance on crypto regulation.
With so many other pressing issues facing the country this election cycle, crypto may not receive the same attention as the border or the economy. But for a certain number of Americans – including some wealthy and influential figures – it could be a deciding factor, and so far Trump appears to have the edge.
Andrew Shirley is a veteran speechwriter and AMAC Newsline columnist. His commentary can be found on X at @AA_Shirley.
If those people who think that crypto currency is something good for the Country and want it to have a prominent place in financial systems ,then I do believe it should be explained in a way that will give people a sense of trust in what it is , why some people think it is necessary and. how it functions. Stocks ,bonds, savings accounts ,checking accounts, are standard procedure — and. the complexity or the simplicity of those investments can vary ,but the. basic understanding of what is going on. is within the intellectual grasp of those making those transactions or those transactions.would not be made . Straight talk is needed with cryptocurrency. Sound reasoning in the explanation of why it should be considered is going to be necessary . And. who is going to provide the understanding of cryptocurrency . What Ethical Standards will be established for cryptocurrency — those are questions that should thought about .
No. Fight it. This is also the beginning of government control. They will be able to track everything we spend. Stick with cash. Once they eliminate cash they will control us
It takes a fool to embrace digital monies.
What is the real investment n backing cryptocurrency that makes it trustworthy? Other than someone’s word.
Not on board with this at all. If it’s not tangible, it doesn’t exist. If you can’t touch it, hold it, see it, put it in your pocket, and carry it with you, it doesn’t exist. This crypto crap, in my humble opinion, is a devil’s scheme to rip people off. The fact that individuals in government think this is a good thing should speak volumes regarding how it cannot be trusted.
One has to wonder the reasoning for going all in with crypto. Our current system is failing badly and it is a fiat currency backed by nothing. So, someone explain how converting our worthless, backed by nothing dollars to worthless backed by nothing “tokens” in the form of the various crypto “miners”, is somehow beneficial. The only difference I see lies in the name of the parties robbing the holder of either.
But then again, the Republican Party has been incredibly stupid before. It wasn’t that long ago when the “wise leadership” of the Party nominated Mitt Romney as our Presidential Candidate or worse, remember John “Baby Killer” McCain?
If this is even being considered as a part of the Party platform, someone needs to do a LOT of thinking first. If a safe alternative to any debt based currency is being considered, why not go with something thats been proven over the millennia and either use physical precious metals such as gold and silver or merely return the damned dollar to a currency backed by gold as it was prior to about this time in 1971. Sure has been one long swirl down the financial toilet since then.
Going all in on crypto seems similar to changing the faces on existing currency. Stupid stuff.
I don’t get it. Its an imaginary currency you buy with real money? I’ll stick to my ATM thanks.
Does Trump and the average American realize the huge amount of electricity required to mine Bitcoin. One plant requires as much electric power as a small city & another fact is that Chinese companies want to build these plants & own them in USA and one must wonder why?
I’m 73 years old. I neither want or need this!
If Republicans want Bitcoin, let them invest their own money in it & do not get one dollar of our USA tax money touching this. Did anyone watch 60-Minutes two days ago & what hackers did to Casinos in Las Vegas? Why do you think these hackers want ransom paid in crypto & the answer is that they cannot be traced. Read last week that Vance has $130K in crptyo but do not know about Trump. This is a real bad idea, and we have had the Federal Reserve since 1913 and it has worked for 111-years so why change now? Trump needs to explain in real terms why he supports this for United States?
The Republican Party is becoming the radical party instead of the conservative party that has made America Great for so many years. In Idaho, their platform does not want any funding to go to higher education. I guess when they need a doctor, they will just go to some state that support education for all Americans.
The good thing about bit coin is you don’t waste paper and ink.