Most of U.S politics is depressingly predictable. If Republicans come out in favor of Position X, it’s a lock that Democrats will vocally oppose it, and vice versa. With only sporadic exceptions, conventional issues like taxes, abortion, climate change, crime, health care, racial justice, gun control, and LGBT rights fall cleanly along the Left/Right axis.
And then there’s crypto.
This feature is part of CoinDesk’s Policy Week.
Take the odd couple of Senators Cynthia Lummis and Kirsten Gillibrand – the Republican from Wyoming and the Democrat from New York. Lummis’ campaign website includes language like “Build the wall on our southern border” and “Stop the socialist agenda,” and she has proudly said that “I am decidedly and passionately pro-life.” Gillibrand, the 2020 Democratic presidential nominee, said that the battle for pro-choice abortion rights is the “biggest fight of a generation.” And yet the conservative and the liberal saw eye-to-eye on crypto, co-sponsoring the “Responsible Financial Innovation Act” that intended to establish and clarify crypto regulations.
“When you look across most of the bills last year, you do have these strange bedfellows,” says Kristin Smith, CEO of the Blockchain Association, adding that it’s a mix of “progressive Democrats and conservative or libertarian Republicans.” She suspects that age is more of a determining factor than political party, as “younger members of Congress seem to grasp crypto faster and quicker than the older members of Congress.”
The Congressional Blockchain Caucus has four co-chairs: two are Republicans and two are Democrats. The caucus itself is broadly bipartisan. Both parties are being lobbied by the crypto industry and benefit from donations: A recent CoinDesk report showed that a jaw-dropping one in three members of Congress received donations from FTX-related entities alone.
So is crypto truly bipartisan? “I don’t know if I completely agree with that thesis,” says Ian Katz, managing director at the research firm Capital Alpha Partners. Katz said the partisan split in crypto is “at times less obvious than most other issues,” but adds that “I do think you can generalize and say that Republicans are more wary of crypto regulations than Democrats.”
And this might have shifted in the past three months. You can “draw a line” before and after the FTX meltdown, says Katz, in the sense that skeptical-but-silent Democrats are now being more vocal. “Post-FTX, Sherrod Brown [Democrat senator from Ohio] felt emboldened to say, ‘I told you so.’”
A comprehensive overview would be tedious – the Congressional Blockchain Caucus alone has over 40 members – but here’s a primer of who’s who in the bewildering world of the Crypto Congress:
The Pro-Crypto Camp
Rep. Tom Emmer (R-Minnesota)
Crypto credentials: Co-chair of Congressional Blockchain Caucus, held the first cryptocurrency town hall, introduced the Securities Clarity Act. (Read more in my recent interview with the Congressman.)
Key quote: “The future is here and crypto has the ability to decentralize control and empower each and every one of us.”
Rep. Ritchie Torres (D-New York)
Crypto credentials: Introduced legislation to bring transparency to crypto exchanges, penned the essay “A liberal case for cryptocurrency.”
Key quote: “Crypto is the future. It could enable the poor to make payments and remittances without long delays and high fees. It could enable artists and musicians to earn a living. It could challenge the concentrated power of Big Tech and Wall Street.”
Rep. French Hill (R-Arkansas)
Crypto credentials: Skeptical of over-regulation, chair of the new Subcommittee on Digital Assets, Financial Technology, and Inclusion committee.
Key quote: “We want innovation for fintech and the use of blockchain to be available in the United States.”
Rep. Ro Khanna (D-California)
Crypto credentials: Introduced the “Keep Innovation in America Act” along with Reps. Patrick McHenry (R-N.C.) and Tim Ryan (D-Ohio).
Key quote: “Web 3.0 will lead to unprecedented job growth and empower Americans to have economic ownership over the internet … Congress should not crush this emerging technology nor pick winners and losers.”
Sen. Ted Cruz (R-Texas)
Crypto credentials: Bought up to $50K in bitcoin in early 2022.
Key quote: “I think Bitcoin means investment. It means opportunity. It means prosperity. It means financial independence. I also think the rise of bitcoin mining in Texas has an enormous positive benefit for resiliency of the grid.”
Sen. J.D. Vance (R-Ohio)
Crypto credentials: Disclosed owning up to $250KJ worth of bitcoin
Key quote: “[Crypto] is one of the few sectors of our economy where conservatives and other free thinkers can operate without pressure from the social justice mob.”
Sen. Kirsten Gillibrand (D-New York)
Crypto credentials: Lummis’ Democratic partner on Responsible Financial Innovation Act.
Key quote: When it comes to crypto regulation “You need basic rules of the road.”
Rep. Patrick McHenry, (R-North Carolina)
Crypto credentials: The incoming chairman of the Financial Services Committee, McHenry is a vocal opponent of over-regulation.
Key quote: “Congress must work to fully understand and embrace these innovative new technologies, like #crypto. We don’t need knee-jerk reactions by lawmakers to regulate out of fear of the unknown.”
Sen. Cynthia Lummis (R, Wyoming)
Crypto credentials: A staple at crypto conferences, dubbed the “Crypto Queen,” co-sponsor of the Responsible Financial Innovation Act, bought bitcoin in 2013.
Key quote: “I say spend dollars and save Bitcoin.”
The Crypto Skeptics/Anti-Crypto Camp
Here it gets a little trickier. While there are tons of crypto enthusiasts in both chambers and on both sides of the aisle, especially in the wake of FTX, the crypto skeptics tend to skew Democratic.
Sen. Elizabeth Warren (D-Massachusetts)
Anti-crypto credentials: Prominent critic of the industry, introduced the “Digital Asset Anti-Money Laundering Act,” which was seen by many in the space as a burdensome over-reach.
Key quote: “Crypto has become the preferred tool for terrorists, for ransomware gangs, for drug dealers, or rogue states that want to launder money,”
Sen. Roger Marshall (R-Kansas)
Anti-crypto credentials: Warren’s co-sponsor of the Digital Asset Anti-Money Laundering Act.
Key quote: Called crypto a “national security threat” and suggested “We should be considering a pause using this as a currency.”
Rep. Brad Sherman (D-California)
Anti-crypto credentials: Called for an outright ban of crypto in the United States.
Key quote: “Bitcoin, it’s not just for narco-terrorists anymore … it’s for tax evaders, too.”
Sen. Sherrod Brown (D-Ohio)
Anti-crypto credentials: Post-FTX, the chairman of the Senate Banking Committee issued a press release proudly stating that “Brown has long expressed skepticism of cryptocurrencies.”
Key quote: “We can’t let thousands of risky and volatile assets that are used only for speculation and sanctions evasion into our banking system, and we know that it’s a national security issue.”
Sen. Jon Tester (D-Montana)
Anti-crypto credentials: Expressed concerns that regulating crypto might give it legitimacy.
Key quote: “I see no reason why this stuff [crypto] should exist. I really don’t.”
Sen. Bernie Sanders (D-Vermont)
Anti-crypto credentials: Worked with Warren on regulations that would make it harder for banks to engage in crypto.
Key quote: “I’m not a big fan of cryptocurrencies. Clearly, they’ve not shown a real public purpose for their existence. They made some people rich, they made a lot of people lose money.”
This list, inevitably, will keep growing as more politicians are forced to go on the record and declare their allegiances. And while crypto is perhaps not as bipartisan as its boosters would like to imagine – with Republicans more receptive, Democrats less so – it might just be bipartisan enough to actually break a gridlock. What that actually looks like is anyone’s guess.