The old saying was, crypto may not be interested in politics, but politics is interested in crypto. Now, crypto is interested in politics, too.
Over the past few weeks, the blockchain industry has mobilized against a heavy-handed attempt at increased regulation. It was a show of force against a crypto tax provision in the Biden administration’s $1 trillion infrastructure package, a provision that fundamentally misunderstands and endangers the domestic cryptocurrency market. These efforts will likely have been in vain in the short-term, as the political machine bulldozes over attempts to amend the bill.
The experience seems like a turning point for crypto as a serious political force in Washington. Some of the industry’s most visible and respected voices – like Ryan Selkis, Meltem Demirors and Barry Silbert – are signaling their new political awareness and willingness to spend big supporting politicians who understand this emergent industry.
“Electoralism is going to become a fact of life for crypto now that it has become popular, even mainstream,” Paul Dylan-Ennis, an assistant professor in the College of Business at University College Dublin, said over Telegram. “We will see more and more serious political organizations” from now on.
There are calls to donate to the coffers of Washington insiders like Cynthia Lummis (R-Wyo.), likely the first U.S. senator to own bitcoin, and Sen. Ron Wyden (D-Ore.), a longtime advocate for financial and digital privacy. The rumblings of new crypto PACs (political action committees) or parties. And a new meme, “I’m a single interest voter” for crypto.
It’s more than just political signaling on Twitter: As the Washington Post reports, cryptocurrency firms are on track to spend more than $5 million on lobbying this year, twice the total from just last year. Organizations like the Blockchain Association and Coin Center have seen donations pour in.
The irony is radicalization in crypto once meant dropping out of the political process. By design, crypto empowers individuals over hegemonic corporations and states – it cuts out the middleman and bureaucrat. That’s why there was some resistance to even calling senators from some corners of the blockchain industry – any engagement with the State is anathema.
But if banks and big tech firms are willing to spend to protect their interests, then so should crypto.
“It's already risky and tricky enough to run validator nodes on emerging crypto networks without Uncle Sam getting involved and making up a whole new set of rules to try to follow,” Lauren G., a noted Ethereum coder, said. She would contribute to a crypto PAC when it comes time to vote, “especially if they take illiquid NFTs (non-fungible tokens).”
It’s entirely possible that politicians will run for office with an explicit crypto mandate. With 13% of Americans trading crypto in the last year and many more aligned with its values of freedom and self-reliance, the Crypto Vote is likely to become a political force that professional pols can't ignore.
“Crypto is bipartisan – and perhaps the only thing out there that is bringing Americans together at a grassroots level rather than pulling them apart,” Balaji Srinivasan, angel investor and essayist, said in a private message.
Still, crypto won't be captured completely by the state and the lobbying process. It might sound trite to say code doesn’t care about Washington, but in this case, it’s true.
“I'm already considering other countries to operate in and, frankly, wouldn't mind leaving the U.S. with the direction all of this is going,” Lauren said. “Competition and innovation will always transcend national boundaries.”