Following the 2024 elections, the crypto industry has come to the fore as a powerful political actor. With a Republican-controlled presidency, Senate, and conservative-majority Supreme Court, the crypto industry has seen significant shifts in the balance of power. It may be an uplifting start in crypto circles, but it also reveals a critical failure within the Democratic Party.
Democrats’ Inadequacy
For years, crypto advocates have demanded clarity over regulatory uncertainty. Industry leaders have continued these efforts by holding policy discussions, holding open-door events at the Securities and Exchange Commission (SEC), and encouraging lawmakers to engage with both departments in public and private spaces.
The image created by Gensler and his team included hatred towards cryptocurrencies. US-based companies have been penalized for not complying with rules that have not existed for years. The only way to avoid being punished was to stay away from the crypto business. But this will change.
The Role of the Crypto Industry in the Future
Under the Republican government, sweeping changes are expected in the crypto industry. Proposals like FIT21 could shift crypto oversight from the SEC to the CFTC. While such regulatory changes are eagerly awaited by the industry, uncertainty about possible side effects continues.
The rise of the crypto industry has significant impacts not only in the financial sphere but also in the balance of political power. Democrats’ negligence in this area led to a failure to recognize the vast economic potential and ultimately to a failure to shape the government’s oversight of cryptoassets. This could profoundly impact the future direction of the crypto industry and financial inclusion in general.
While the crypto industry is gaining political power in itself, an important question remains how to use this power and balance it with other fundamental rights. The sector will need to act collaboratively with policymakers to sustain its potential to drive financial empowerment of communities.
The crypto industry must recognize that innovation is inseparable from other fundamental rights. Financial empowerment combined with the protection of fundamental rights will enable the crypto industry to grow in a sustainable and inclusive way. It was something we had been writing about for more than a year that the process that started with the South Korean elections would evolve to this point. Parties targeting the government must now have something grounded to say about cryptocurrencies.
This new role of the crypto industry in politics will be critical to future policy decisions and regulations. As the industry gains power, it must tread carefully on how to use this power for social good.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
