November’s Election Will Be a Crypto Crossroads for America

In recent years, the crypto movement has quietly upended America’s political, financial, and technology sectors. Every day, business leaders are adapting to its many implications, Silicon Valley entrepreneurs are spearheading new uses, and elected officials and candidates of both parties are navigating the previously uncharted political waters of digital currency.

As the crypto revolution continues, one key question is emerging: what role will the U.S. play in its development—and what can Americans expect in the years ahead?

Cryptocurrency is a form of digital money that operates online, without physical coins or paper bills. It relies on advanced computer systems and encryption techniques to secure transactions and control the creation of new units. Transactions are recorded on a digital ledger called a “blockchain,” which ensures transparency and prevents fraud. People can use cryptocurrencies to make purchases, send money to others, or invest, all via the internet using computers or mobile devices. Unlike traditional currencies managed by governments and banks, cryptocurrencies are decentralized and can be used worldwide.

In the political realm, the partisan battlelines on crypto have not yet been firmly established, with both Democrats and Republicans sparring against each other in cross-party fashion. Perhaps most notably, President Joe Biden and Senator Elizabeth Warren (D-MA) have emerged as fierce opponents of the industry. In 2022, Warren introduced the far-reaching “Digital Asset Anti-Money Laundering Act,” a legislative initiative that would impose myriad regulations on crypto services and technologies.

“Crypto has become the preferred tool for terrorists, for ransomware gangs, for drug dealers, or rogue states that want to launder money,” Warren has stated.

Meanwhile, Joe Biden recently vetoed a resolution that rolled back U.S. Securities and Exchange Commission (SEC) guidelines that discouraged banks from holding digital assets—even despite the resolution’s broad bipartisan support in Congress.

In a showcase of the lingering intra-party squabbles over crypto, far-left figures like Senator Chuck Schumer (D-NY) and Senator Kirsten Gillibrand (D-NY) have supported crypto and broken with Biden and Warren. Meanwhile, Senator Roger Marshall (R-KS) cosponsored Warren’s resolution and has been a vocal critic of cryptocurrency.

Also on the right, however, figures like former President Donald Trump and Senator J.D. Vance (R-OH) have championed the rise of crypto. “I will stop Joe Biden’s crusade to crush crypto,” Trump said in a May speech. “We are going to stop it. I will ensure that the future of crypto and the future of Bitcoin will be made in the U.S.A., not driven overseas. I will support the right to self-custody to the nation’s 50 million crypto holders… I will keep Elizabeth Warren and her goons away from your Bitcoin.”

Vance has similarly praised crypto as “one of the few sectors of our economy where conservatives and other free thinkers can operate without pressure from the social justice mob.”

Which side of the bipartisan crypto battle, then, is more firmly on the side of American innovation and prosperity?

In a recent conversation with AMAC Newsline, Casey Mulligan, the former chief economist for the Council of Economic Advisers in the Trump White House and a Professor of Economics at the University of Chicago, shared some thoughts.

“I’ve always taught in my classes how the Federal Reserve is a government agency—therefore, anti-innovation,” Mulligan said. “I’ve been saying my entire career that [there are] innovative things in the area of monetary economy that aren’t happening because we have government running it. And now, there’s some innovative things we can even see, but the government can be very slow to adopt, and probably makes the wrong choices.”

“The dollar is a pretty good product compared to the other foreign currencies run by the other governments,” Mulligan continued. “So that is some kind of incentive for the government to roll out new products to satisfy this very large market for dollars.”

In addition to widespread openings for innovation and prosperity, a recent Wall Street Journal op-ed observed that crypto could play a major role in staving off the American debt crisis and helping the United States remain competitive with China. “If other countries are successful at bolstering their currencies’ influence while dumping Treasury debt, the U.S. will need to find new ways to make the dollar more attractive,” the op-ed states. “Dollar-backed stablecoins are one answer.” (A stablecoin is a crypto asset with the value pegged to the value of the U.S. dollar—much like a virtual copy of a real dollar.)

Given the wide array of benefits emanating from the crypto movement, why are Biden and other elected officials so hesitant to jump on board?

Biden has previously condemned crypto traders as “wealthy tax evaders,” and his administration has instead opted to support the creation of a Central Bank Digital Currency (CBDC). Unlike most cryptocurrencies, CBDCs are centralized and issued by the government. CBDC proponents argue that this provides a secure and government-backed alternative for digital transactions, combining the efficiency of digital payments with the stability and trust of traditional fiat money.

However, the very fact that a central bank is involved in controlling the CBDC poses major threats to privacy and freedom. Many argue that a CBDC would make it even easier for a government to “cancel” or “de-bank” disfavored entities by invalidating their digital cash. As it exists now, the decentralized nature of cryptocurrency means that such actions are generally not possible.

Biden’s move to use federal power to control the crypto market has been almost universally slammed by conservatives as tyrannical, authoritarian, and un-American. As a recent column in Bitcoin Magazine put it, Biden’s embrace of a CBDC in lieu of cryptocurrency reveals his “true colors.”

“Our country must be the leader in this field,” Trump recently posted on his Truth Social account about crypto. “There is no second place.”

Whether the U.S. government will in fact greenlight the development of crypto technology and emerge as the world’s crypto leader will be in large part determined by the winner of the November presidential election, which could have transformative effects on the future of American innovation and the global strength of the American economy.

This fall, crypto is on the ballot—and the world will be watching.

Aaron Flanigan is the pen name of a writer in Washington, D.C.