Does Biden’s Acceptance of Crypto Donations Signal Political Legitimacy?

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KEY TAKEAWAYS

  • The Biden campaign is exploring accepting crypto donations via Coinbase Commerce.
  • The campaign's interest in the crypto community aims to attract crypto-focused voters and donors, partly in response to former President Donald Trump's pro-crypto stance.
  • Biden recently vetoed a congressional resolution, leading to criticism from the crypto community.
  • Despite efforts to develop a coherent crypto messaging strategy, skepticism remains regarding Biden's ability to attract pro-crypto donors.
  • In contrast, Donald Trump aims to position himself as the "crypto president."

U.S. President Joe Biden’s campaign has engaged in discussions with players in the cryptocurrency industry regarding the possibility of accepting crypto donations through Coinbase Commerce, a leading payments service enabling merchants to accept various cryptocurrencies.

The Biden campaign has yet to officially comment on the matter. However, sources familiar with the matter reportedly told The Block that the move is part of a broader strategy to court crypto-focused voters and tap into a potential source of funding from pro-crypto donors.

The Biden campaign’s interest in engaging with the crypto community has gained momentum in recent weeks, likely in response to the pro-crypto stance adopted by his political rival, former President Donald Trump.

“They’re paying attention to issues around crypto and are trying to find quick wins to show that they’re supportive of the industry,” said one source, who allegedly works with politicians and crypto industry leaders.

“[They want] to show that they’re not the enemy.”

Biden Faces Criticism for Vetoing SAB 121

Earlier this month, Biden vetoed a congressional resolution aimed at overturning the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121. The resolution targeted the SEC’s guidance on how banks handle customers’ crypto assets, treating them as liabilities.

The decision to veto the resolution sparked frustration within the crypto community. The Blockchain Association, a crypto advocacy group, expressed disappointment, stating that the administration’s choice to override bipartisan majorities in Congress was disheartening.

Others, such as Cody Carbone, the Digital Chamber’s chief policy officer, described it as a “slap in the face to innovation and financial freedom.”

Following the criticism directed at President Biden for rejecting the SAB 121 bill, the Biden team started to intensify efforts to develop a coherent crypto messaging strategy.

Specifically, Biden’s re-election campaign began reaching out to cryptocurrency industry players, seeking guidance on “crypto community and crypto policy moving forward.”

Biden Might Not be Able to Attract Crypto Donors

However, the crypto community persists in its skepticism regarding Biden’s ability to attract pro-crypto users. Nic Carter, a partner at Castle Island Ventures, highlighted several unfavorable policy decisions and enforcement actions undertaken by the Biden administration.

These actions include pressuring banks to sever ties with crypto clients, initiating legal proceedings against major crypto exchanges, and imposing regulatory burdens on Bitcoin miners and stablecoin projects.

Carter also noted the administration’s failure to provide clarity on securities regulations while selectively enforcing them. This effectively rendered decentralized finance (DeFi) projects virtually illegal in the U.S. and introduced legal risks for participants in decentralized autonomous organizations (DAOs).

Given this track record, Carter questioned the audacity of expecting crypto donations for the Biden campaign. “And they have the absolute temerity to think we’re gonna donate crypto to the campaign?” he wrote.

While the Biden administration has long maintained a stringent stance on the crypto industry, recent developments suggest a potential shift in their approach. The passage of crypto-focused legislation and the sudden approval of spot Ethereum (ETH) exchange-traded funds (ETFs) indicate a softening stance.

Many attribute this shift to Biden’s competition with his predecessor, Donald Trump, who has shown a friendlier disposition towards the crypto industry.

Trump Aims to Become the “Crypto President”

In stark contrast to Biden’s approach to cryptocurrencies, Trump has ramped up his advocacy for digital assets, now setting his sights on becoming the “crypto president.”

According to a Reuters report, he made the comment during a fundraising event in San Francisco co-hosted by Craft Ventures’ general partner, David Sacks, and tech billionaire Chamath Palihapitiya.

More recently, Trump said in a post on Truth Social that he is determined to position the U.S. as a global leader in the cryptocurrency field. He emphasized that the country must take the lead and asserted that there is no room for second place in this burgeoning industry.

“I am very positive and open minded to cryptocurrency companies, and all things related to this new and burgeoning industry. Our country must be the leader in the field,” said Trump.

He has also promised to grant a presidential pardon to Ross Ulbricht, the creator of the Silk Road darknet marketplace if he wins the upcoming November election.

Furthermore, Trump’s campaign openly accepted cryptocurrency donations, utilizing the services of Coinbase Commerce, the same payment platform under consideration by the Biden campaign.

It is worth noting that pro-crypto donors have already begun mobilizing. Open Secrets data, cited by consumer rights advocacy group Public Citizen, indicates that crypto-backed super PACs have amassed a staggering $100 million war chest.

Meanwhile, PolitiFi meme coins like $STRUMP and $BODEN are riding the volatility rollercoaste with every turn in the run-up to the election.

The Bottom Line

The Biden campaign is considering accepting crypto donations via Coinbase Commerce, aiming to attract crypto-focused voters and donors. The initiative comes partly in response to former President Donald Trump’s pro-crypto stance and his efforts to position himself as the “crypto president.”

Despite the campaign’s attempts to develop a coherent crypto messaging strategy, skepticism remains about Biden’s ability to attract pro-crypto donors due to his administration’s previous unfavorable policies.

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