Crypto has become a key political issue
Crypto has broken into the national discourse this election cycle.
So we measured swing states’ relative levels of crypto interest. Two battlegrounds expected to be among the tightest races in November — Pennsylvania and Wisconsin — have seen the fourth- and fifth-biggest jumps in crypto search interest since the last election in 2020, measured as a proportion of total searches using Google Trends.
Michigan saw the eighth-biggest jump in crypto search interest, while Georgia stayed put. Meanwhile, Arizona and Nevada experienced moderate drops in interest since 2020.
One factor that could have raised people’s crypto interest this year was the listing of Bitcoin and Ethereum exchange-traded products (ETPs). The number of Americans who hold crypto could grow as ETPs such as these broaden investor access. Together, the Bitcoin and Ethereum ETPs already contain $65 billion in onchain holdings. (Note: Though commonly called ETFs, these products are actually registered as ETPs using SEC Form S-1, indicating the underlying portfolios are not comprised of securities.)
The SEC’s ETP approvals represent major crypto policy milestones. Regardless of which party wins office in November, many politicians expect momentum to build with the passage of bipartisan crypto legislation. An increasing number of policymakers and politicians are speaking positively about crypto on both sides of the aisle.
The industry has inspired other significant movements on the policy front this year as well. At the federal level, the House of Representatives approved the Financial Innovation and Technology for the 21st Century (FIT21) Act with bipartisan support, including 208 Republicans and 71 Democrats voting in favor. Pending Senate proceedings and approval, the bill could provide much-needed regulatory clarity to crypto entrepreneurs.
No less meaningfully, at the state level, Wyoming passed the Decentralized Unincorporated Nonprofit Association (DUNA) Act, a law that gives decentralized autonomous organizations (DAOs) legal recognition and enables blockchain networks to operate lawfully without compromising on decentralization.
The EU and the United Kingdom have been the most proactive in engaging the public on questions of crypto policy and regulation. Various European agencies have put out many more calls for input than, for example, the U.S. Securities and Exchange Commission. Meanwhile, the European Union’s Markets in Crypto Act (MiCA) is the first comprehensive crypto-related policy regime to pass into law and it is set to come into full effect by the end of the year.
Stablecoins — which have become one of the most popular crypto products — are one of the biggest topics for policy discussion, with several bills already floating around Congress. One of the tailwinds, at least in the U.S., is the realization that stablecoins can fortify the U.S. dollar’s position abroad even as the dollar’s global reserve currency status slips. Today, more than 99% of stablecoins are denominated in USD, which dwarfs the next largest denomination: 0.20% in Euro.
In addition to projecting the power of the American dollar around the world, stablecoins are potentially strengthening the country’s financial footing at home. Despite being only a decade old, stablecoins have risen to become a top 20 holder of U.S. debt, putting them ahead of countries like Germany.
While some countries are exploring central bank digital currencies (CBDCs), the stablecoin opportunity sitting right in front of the U.S. is ripe for the taking. Between these discussions and the number of prominent political figures now weighing in about crypto generally, we expect more countries will start to flesh out their crypto policies and strategies in earnest.
This post is an excerpt from our 2024 State of Crypto Report.
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