Crypto and Government

🌐 Crypto and Government

It’s not just about the price

We've recently seen crypto become more visible on the political front.

Candidates talking crypto and accepting donations in crypto is a minor move making big headlines.

In this article, however, I want to investigate the bigger impact of bitcoin, crypto, blockchain and the ethos they bring to government.

The Obvious

Third party candidate RFK, Jr. was first to talk crypto in a positive way. He has been accepting crypto donations. He proposed putting the government budget on a public blockchain for transparency.

Recently, poll frontrunner Donald Trump started accepting crypto donations. He then met with bitcoin miners in Florida, and wants all bitcoin mined in the US (which is ridiculous).

President Biden even succumbed to the pressure to accept crypto donations. Of course this is awkward considering his administration is doing its best to make crypto mostly illegal, or so regulated it becomes useless.

On the negative side, we had Elizabeth Warren and her anti-crypto army. We also have Gary Gensler and his crusade against Coinbase and all crypto entities.

Recently we saw Democrats start to break ranks with Warren and Biden to try to repeal SAB121 and pass FIT21. Interesting to note the average age of the Dems breaking ranks was much younger than those holding the party line.

I don't know if they're siding with crypto because they believe in it, or they want the crypto vote.

I've said since mid-2023, the ETF approvals would be largely political. The administration doesn't want the SEC in legal battles with BlackRock and Fidelity in an election year.

The crypto lobbying groups have been pushing even more, looking to educate legislators and regulators.

Vote for Crypto?

Recently, Blockworks published an op-ed urging crypto investors not to be single-issue voters just to pump their bags.

I think there are plenty of people that would vote Republican in November solely to help their investments grow. That isn’t much different from those in the Oil & Gas, banking, or technology industries siding with a party to make their livelihood more profitable.

With bitcoin, crypto, and blockchain, I think it goes a bit further. Those of us that have gone down the rabbit holes, invested, and even made a career out of this industry are more cognizant of the problems with the current government and economic systems.

Our understanding of Bitcoin gives us a different view of fiat currencies, central banks, and inflation.

We see that a promise to pay student loan debt is actually a loan from our kids in the form of decreased purchasing power.

We know other countries’ choice to move away from dollar-denominated transactions is due in part to our ballooning debt.

We view decentralization and transparency as important characteristics of a financial system, and we don’t appreciate more government oversight, less privacy, and shady CPI calculations.

We want freedom to transact, hold our assets in a way we choose, and participate in the financial system.

Increased enforcement actions run counter to the ethos and ideals of crypto.

So the crypto-related policies of an administration really informs us of their values. The actions speak much louder that the campaign speeches.

Another Option

We got to this point, where the government is so powerful because they control the money supply, and they determine the regulations the banks need to follow.

This isn’t just a US thing. Several countries, like El Salvador, pegged their currency to the dollar, outsourcing valuation to the Fed. Countries like Argentina and Turkey made a policy of extreme inflation.

So much of the power governments have over their people comes down to control over the money supple and the banks. The people don’t have a way to opt out of the banking system.

Recently, we’ve seen the power of another option.

El Salvador chose to make bitcoin legal tender, and started accumulating bitcoin as part of its treasury.

Argentinian citizens have been among the largest users of stablecoins and DeFi, and recently elected Javier Milie, who is pushing a revolutionary agenda to curb rampant inflation and government spending.

Million in Africa are using crypto, just as they once used MPesa as a currency.

I’m not saying crypto and blockchain are causing changes to governments. I’m saying the idea of another option makes people study, understand, and open their eyes to the problems and potential solutions.

Saudi Arabia ditched the Petro-dollar, and the BRICS nations talked of launching their own stablecoin.

The options outside the currency system will have ramifications in all geopolitics.

A financial system that mirrors the Internet in terms of openness and reach will change the economic landscape.

What am I trying to say?

I rambled quite a bit here. I think the point is that bitcoin, crypto, and blockchain started as a niche technology. They became tools for financial speculation, which is how most people know them.

They are becoming important technologies and systems in politics and government. Trillions in interest from investors. A viable economic option. A realization that freedom of money is important.

Crypto and blockchain aren’t niche, cute, or speculative anymore.

Have a great week

Adam