As the 2024 U.S. presidential election approaches, the debate over cryptocurrency regulation and the future of digital assets has once again found itself at the forefront of political discourse. The candidate who ultimately takes office could significantly shape the future of crypto regulation, particularly in areas such as stablecoins, decentralized finance (DeFi), and central bank digital currencies (CBDCs). In this contest, former President Donald Trump and current Vice President Kamala Harris hold distinct, often contrasting, positions on cryptocurrency—a reality that has the crypto community divided on who they should endorse.

Kamala Harris: A Pragmatic Approach to Crypto Regulation

Vice President Kamala Harris has not been outspoken about cryptocurrency during her tenure, but she aligns closely with the Biden administration’s stance, which has focused on consumer protections, regulatory clarity, and measured oversight. Her approach to digital assets seems to emphasize regulatory balance and the exploration of potential benefits and risks. The Biden administration’s policy underlines a cautious attitude toward crypto that emphasizes protecting the traditional financial system.

1. Executive Orders and Reports on Crypto: In 2022, President Joe Biden issued an executive order calling for a comprehensive study of digital assets and potential U.S. policy responses. Though Harris had no direct role in this order, she has stood by the administration’s findings, which favor regulating crypto to prevent systemic risks while enabling innovation. The administration has recommended consumer protection measures as well as a central bank digital currency (CBDC), which could compete with or even limit the role of decentralized cryptocurrencies.
2. Stablecoins and Consumer Protections: Harris’s camp has shown support for the regulation of stablecoins, which are widely used in the crypto community for pegging digital assets to fiat currencies. The current administration’s proposed regulations would ensure that stablecoin issuers adhere to banking-like regulations, requiring sufficient reserves and clear operational transparency.
3. Environmental Concerns: As Vice President, Harris has been vocal about environmental concerns, which includes the significant energy consumption of crypto mining. The Biden administration has explored ways to reduce the environmental impact of crypto mining, a stance that Harris is likely to maintain. Crypto proponents worry this could lead to more restrictions on proof-of-work mining practices.

Though Harris herself has not been a prominent advocate of cryptocurrency, her alignment with the Biden administration has reinforced a cautious, regulated stance. Some crypto advocates fear her approach may be overly regulatory, potentially stifling innovation and forcing companies to relocate to more crypto-friendly jurisdictions like the UAE and Singapore.

Donald Trump: From Crypto Skepticism to Embracing Digital Assets

Donald Trump’s views on cryptocurrency have evolved significantly. During his presidency, he was an outspoken critic, referring to Bitcoin as a “scam” and expressing concerns over crypto’s potential to facilitate crime. However, since leaving office, Trump’s views have shifted, particularly through his recent embrace of digital assets as a fundraising tool.

1. NFT Ventures and Digital Asset Embrace: In 2022, Trump released a series of NFTs, showcasing a sudden shift from crypto criticism to involvement in the digital asset space. His NFT collections, marketed as digital collectibles for supporters, were launched on the Ethereum blockchain. While NFTs are a different class of digital assets from cryptocurrencies like Bitcoin, this pivot indicated a more favorable attitude toward digital assets in general, and it has been noted by some in the crypto community.
2. Critique of CBDCs and Government Control: Trump’s stance on a central bank digital currency has been decisively negative. He argues that a U.S. government-controlled digital dollar could limit citizens’ financial freedom, echoing concerns that many in the crypto community share. Trump has framed CBDCs as a potential overreach by the government into private financial transactions, a position that resonates with those who see Bitcoin and other cryptocurrencies as tools for personal financial sovereignty.
3. Economic Freedom and Deregulation: Known for his deregulation policies, Trump has hinted at the possibility of relaxing regulations around cryptocurrency and digital assets if re-elected. He argues that over-regulation could push innovation offshore and stunt the growth of the U.S. crypto industry. Though Trump hasn’t provided detailed policy proposals, his rhetoric suggests a preference for less governmental interference in the digital asset sector, aligning him with the sentiments of some in the crypto world.

Though Trump’s embrace of crypto is limited, his opposition to CBDCs and his alignment with deregulation principles have made him a more appealing candidate to certain factions within the crypto community. Many who see crypto as a tool to enhance economic freedom view Trump as a candidate who might keep regulation at bay.

Who is the Crypto Community Backing?

In an atmosphere charged with regulatory uncertainty, the crypto community has not reached a clear consensus on a preferred candidate. However, sentiments generally favor Trump, particularly among Bitcoin advocates and those who prioritize decentralized financial sovereignty over government intervention.

• Pro-Trump Sentiment Among Libertarian Crypto Advocates: Many in the libertarian wing of the crypto community appreciate Trump’s vocal opposition to CBDCs and his historical emphasis on economic deregulation. Trump’s anti-establishment persona and his critiques of centralized digital currencies resonate with those who believe crypto should remain free from government intervention.
• Concerns with Harris and the “Over-Regulation” Issue: Those who oppose Harris’s perceived regulatory stance worry that the current administration’s policies could increase compliance costs for crypto companies and deter innovation within the U.S. borders. Additionally, some fear that Harris’s potential presidency could lead to further environmental crackdowns on crypto mining, which could negatively impact Bitcoin’s future within the U.S.
• Divided Endorsement Among Institutional Investors and Blockchain Companies: Major crypto companies and institutional investors are taking a more cautious stance. Though they see value in reduced regulation, they also understand the benefits of regulatory clarity, which could legitimize the industry and open it to a wider range of mainstream investments. For these institutional players, neither Trump nor Harris offers a fully satisfactory crypto stance, as they desire clear but not overly restrictive regulatory frameworks.

A Crucial Decision for Crypto’s Future in the U.S.

The outcome of the 2024 election will likely have far-reaching implications for the future of crypto regulation in the United States. Harris, in line with the Biden administration, favors a cautious and regulated approach, aimed at protecting consumers and the environment while studying the merits of a central bank digital currency. Trump, by contrast, promotes economic freedom and expresses concerns about government overreach, though his history with NFTs hints at a newfound interest in digital assets.

While the crypto community’s endorsement of Trump reflects a desire for less governmental interference, it’s far from unanimous. Institutional players remain cautious, eager for a candidate who can provide balanced oversight without excessive restriction. As November 2024 draws near, the crypto world will be watching closely, knowing that the next four years could significantly shape the trajectory of digital currency in America.