Where The Top Six Potential Biden Replacements Land On Crypto

President Biden’s dismal debate performance on Thursday night has Democrats considering a replacement before the nominating convention next month in Chicago. Although the president appears resolved to remain at the top of the ticket, at least for now, attention is shifting to how these successors might perform in the general election and their policies on critical issues.

A few thousand votes could be decisive, and suddenly, crypto is becoming a winning election issue for Republicans, including former president Donald Trump. Although Trump said he was “not a fan” of cryptocurrencies while in office from 2016-2020, he made an about-face in late May, promising to make the United States a world leader in cryptocurrency by ending regulatory hostility. Republicans in Congress are also leading efforts to craft crypto-friendly legislation that would clear the way for the broad assimilation of the $2.4 trillion industry into the American economy.

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This policy shift starkly contrasts the Biden administration, which has drawn the community’s ire. This is primarily due to the Security and Exchange Commission (SEC)’s proclivity under Chairman Gary Gensler to sue exchanges and token issuers for alleged violations of 90-year-old federal securities laws instead of yielding to industry demands by creating new crypto regulations.

“Imagine if there are 20,000 people in Wisconsin who are single-issue voters, and they’re like, “You know what? I’m either not going to show up and press the button for Joe Biden, or I’m voting for Trump because he is pro-crypto,” says Trump’s former White House Communications Director Anthony Scaramucci, who now supports Biden’s re-election campaign.

Furthermore, the crypto industry is flexing its muscles more than ever. On the back of bitcoin reaching an all-time high price of $74,000 in March, Political Action Committees focused on crypto issues have raised more than $100 million, the third most of any cause this election cycle, from the likes of Coinbase, Coinbase CEO Brian Armstrong, Ripple, Andreessen Horowitz,and Cameron and Tyler Winklevoss, according to a report from Public Citizen. They have already defeated anti-crypto candidates in key New York and California primaries. These ready-to-spend funds could become even more critical for a Biden replacement that would need to assemble a campaign war chest quickly.

None of the candidates responded to Forbes requests on their cryptocurrency policies since Thursday night’s debate, but here is an overview of their prior positions and legislative history with the industry.

Vice President Kamala Harris

Vice President Kamala Harris has been quiet about her stance on cryptocurrency regulation despite hailing from the tech-dominated San Francisco Bay Area. However, if she were to assume the candidacy (or presidency, for that matter), it is fair to expect that her policies would mimic those of the current president.

The Biden Administration has pledged to take a “whole of government” approach to regulate crypto, signing an executive order in September 2022 outlining six priorities: consumer and investor protection, financial stability, financial crimes, global competitiveness, financial inclusion, and innovation, even though most of the activity so far has focused on enforcement actions by the SEC. President Biden also recently vetoed a congressional repeal of SEC Staff Accounting Bulletin 121, which essentially barred banks from custodying digital assets such as bitcoin and ether on behalf of customers to the industry’s dismay.

California Governor Gavin Newsom

Newsom has taken a cautious stance on cryptocurrency regulation as the elected leader of a state known both for progressive policies and technological innovation.

In May 2022, the beginning of the bear market, Newsom signed an executive order to create a framework for licensing cryptocurrency companies in the state. However, he vetoed a draft of such a bill that September, a few weeks before the FTX crash, saying it was “premature to lock in a licensing structure” and that “a more flexible approach is needed.” The governor was criticized by consumer advocates for failing to act in time, in response to which he told the Los Angeles Times he didn’t regret his decisions.

Newsom ultimately signed Assembly Bill 39, titled the Digital Financial Assets Law, in October 2023, which tasks the Department of Financial Protection and Innovation (DFPI) to create a licensure and enforcement framework for the state by July 1, 2025. At the time of signing, Newsom cautioned about “ambiguity” in the law and urged further refinement, while the DFPI is currently taking public comments.

California’s law has the potential to compete with the BitLicense regulatory regime in New York, a controversial piece of legislation that is nevertheless the most robust regulatory construct in the country. According to Bloomberg Law, about one in four North American cryptocurrency companies are headquartered in California.

Colorado Governor Jared Polis

Polis is the potential Democratic presidential nominee who is the friendliest to the cryptocurrency industry. The Libertarian-leaning Democrat positions cryptocurrency as an example of technological and financial freedom, describing it as an antidote to “big government” at the state capitol on February 27th, so-called “Blockchain Day,” 2022.

Like Trump, Polis accepted campaign contributions in cryptocurrencies, accepting major tokens like bitcoin and ether and even “memecoins” like dogecoin and shiba inu coin. The state of Colorado also began taking tax payments in cryptocurrency under his leadership in 2022, although such payments must be made through the Paypal Cryptocurrencies Hub, which converts them to fiat before the transaction.

However, most of Polis’ industry advocacy ended after 2022. Polis spoke at ETH Denver in February of that year, saying he wanted Colorado to become “the first digital state.” He had also spoken at the convention in 2020 and 2021. In 2022, he also speculated about putting the state’s cattle branding registry on the blockchain to make government processes more efficient, transparent, and decentralized. He said the state’s cooperative business laws made it an ideal place to create a decentralized autonomous organization or DAO. Polis said then that he did not personally own any cryptocurrency.

In 2016, when Polis was a member of the House of Representatives, he was a founding member of the Congressional Blockchain Caucus.

Polis has not spoken about cryptocurrency since the collapse of FTX.

Illinois Governor J.B. Pritzker

Pritzker has been relatively quiet on cryptocurrency, engaging with the industry primarily as an opportunity to promote economic development in Chicago. In 2021, for example, Pritzker traveled to cryptocurrency trading platform Coinflip’s Grant Park-adjacent offices to celebrate the announcement of its new headquarters there. Pritzker said that “the future of crypto is in Illinois.” Like Polis, much of Pritzker’s technology enthusiasm has shifted toward support for the quantum computing industry since 2022.

The Illinois State Financial Protection Agency announced a set of cryptocurrency consumer protection laws in February of last year, but Pritzker did not publicly take credit for it. The set of two bills focuses on updating financial regulations for digital money transmission, which a press release compares to New York’s BitLicense and California’s proposed licensing structure, and strengthening enforcement of the regulations for the sake of protecting everyday people. Democratic state representatives Mark Walker and State Senator Laura Ellman sponsored the bills.

Pennsylvania Governor Josh Shapiro

Shapiro hasn’t shared his perspectives on federal cryptocurrency regulation publicly. However, state tax breaks created to encourage the creation of data centers in the state have been utilized by crypto mining companies, ballooning taxpayer costs from $5 million to $90 million by 2027. Environmental group Save Carbon County sued Polis and a cryptocurrency mining company in March for allegedly polluting the environment while receiving $29 million in tax credits from the state over the past two years.

Pennsylvania’s Department of Banking and Securities moved to include “cryptocurrency” in its definition of “money” when overseeing the state’s money transmission law, effectively saying it has the authority to regulate some aspects of the cryptocurrency industry in the state. This is a reversal from a 2019 policy in which the department said did not consider cryptocurrency money for its purposes. There haven’t yet been any major regulatory actions as a result, and Shaprio has not taken any responsibility for the change or commented on it.

Gretchen Whitmer

Michigan Governor Gretchen Whitmer also has yet to comment on cryptocurrencies publicly. In December 2019, the last year of Whitmer’s first year in office, four bills were enacted to include cryptocurrency and distributed ledgers in the state’s penal code, enabling the state to prosecute financial crimes. State laws also require a license for transmitting money, which includes “funds in an e-wallet” according to the Department of Insurance and Financial Services.