Harris dips a toe in the crypto waters — is it enough?

As someone who has been closely following the crypto space for several years now, I can’t help but feel a sense of cautious optimism about Kamala Harris’ recent acknowledgement of the sector. While her past actions have left many in the community feeling neglected, it’s important to remember that this is the first time her campaign has officially addressed crypto. However, as someone who’s seen promises made and broken more times than I care to count, I’m not ready to pop the champagne just yet.

The team supporting presidential candidate Kamala Harris has spoken out about cryptocurrency for the first time. However, some are questioning if their measured stance comes a bit too late or insufficient in today’s rapidly evolving digital economy landscape.

As a dedicated researcher, I’ve observed that for quite some time, the discourse surrounding Kamala Harris’ views on cryptocurrency has been relatively subdued within her campaign. This silence has sparked much curiosity and speculation among many about her potential stance towards this dynamic industry. Fortunately, it seems that the wait is now coming to an end.

Based on a Bloomberg article published this week, during a discussion at the Democratic National Convention in Chicago on Wednesday, Brian Nelson, one of Harris’ key advisors, offered some details about her possible policy plans.

As an analyst, I can rephrase Nelson’s statement in a straightforward and personal manner like this: “Nelson mentioned that Vice President Harris intends to back policies that allow the expansion of emerging technologies, including the cryptocurrency sector. While the statement is general regarding ’emerging technologies,’ it marks the first declared stance from the Harris team on the crypto industry.”

Besides emphasizing the importance, Nelson also pointed out the necessity for transparent rules, drawing attention to incidents similar to the downfall of FTX that occurred in November 2022.

The Harris campaign’s tentative backing for the industry stands in stark contrast to the bold declarations and pledges from Republican nominee Donald Trump regarding cryptocurrencies, even though he once referred to Bitcoin as a “scam” and expressed worries about it potentially undermining the U.S. dollar, prior to this campaign.

At a significant speech during a Bitcoin gathering in Nashville, Trump announced his plan to dismiss Gary Gensler, an unpopular figure among cryptocurrency circles who currently serves as the Chairman of the Securities and Exchange Commission. This declaration was greeted with applause from the crowd. Furthermore, he disclosed his ambition to establish a national Bitcoin strategic reserve within the U.S., should he be elected. Additionally, he expressed his backing for American crypto miners.

As both contenders articulate their stances on cryptocurrency, it’s clear that the direction of digital currencies within the U.S. might significantly diverge based on the election results, thereby gradually transforming into a topic of shared interest across political lines.

Let’s delve further into potential implications for the cryptocurrency market, considering Harris’ developing role, and explore how it may influence the sector’s future trajectory.

Uphill battle for Harris

1. Harris encounters a difficult task in persuading crypto enthusiasts to support her, as they’re currently disappointed with the strict regulations enforced by the current government, particularly the perceived overly firm approach of the Securities and Exchange Commission (SEC) under Gensler.

The Harris team’s cautious but positive first public statement this week could be a turning point. But other recent events from the Harris campaign continue to overshadow the sentiment in the crypto community.

As the countdown began for the 2024 DNC in Chicago, just days before Nelson’s statement, the Democratic Party unveiled its updated platform – a comprehensive 92-page document drafted during President Biden’s reelection campaign. Remarkably, this extensive blueprint made no reference to cryptocurrency, an omission that stirred controversy within the industry. While some analysts like myself viewed this as a promising sign of potential change, many in the crypto community perceived it as a continuation of the Biden Administration’s existing stance on digital currencies.

Additionally this week, Harris faced criticism from the crypto community due to a misunderstanding about her endorsement of a previous tax proposal on unrealized capital gains, which was incorrectly attributed to her by some in the community.

The gossip spread quickly on X, leading some unhappy cryptocurrency traders to incorrectly assume that Harris advocated for a tax which might compel them to sell off substantial portions of their investments. However, this proposed tax policy, unveiled by the Biden administration in March as a potential 2025 measure, would likely not impact most American crypto investors, since it would only affect those with over $100 million in total assets.

Last week, Harris encountered criticism following her non-attendance at a virtual town hall meeting organized by the grassroots movement Crypto4Harris. This event was considered a lost chance for trust-building and direct interaction with the crypto community. The absence of Harris specifically was quite conspicuous, leaving many attendees disheartened.

Despite prominent backing by individuals such as Mark Cuban and Chuck Schumer (Senate Majority Leader), along with prerecorded speeches by Senator Gillibrand and others, the audience remained unresponsive, leaving them puzzled instead of informed due to an excess of unanswered questions.

Given the latest events, the Harris team’s Wednesday declaration advocating for the cryptocurrency sector might be interpreted as an initial constructive action towards resolving these issues. However, mere words may not suffice, as demonstrated by the negative public response.

Public backlash and mistrust

Although the Harris campaign has recently declared its stance, there is still a significant portion within the cryptocurrency sector who are hesitant and cautious about endorsing her as an authentic supporter for the industry.

actions speak louder than words. He’s concerned about the lack of concrete strategies or plans, and he’s urging for “real, tangible steps” to help strengthen the cryptocurrency sector.

It seems that you are expressing concern over the lack of concrete policies or proposals, and are questioning if Gary will be dismissed, what legislation is supported, and what executive orders will be implemented. Furthermore, you are asking why there hasn’t been an immediate change in policy given the current presidency. Lastly, you emphasize that trust requires tangible actions rather than just talk.

— Charles Hoskinson (@IOHK_Charles) August 21, 2024

Echoing Hoskinson’s doubts, Eleanor Terrett, a reporter from Fox Business, pointed out that the term “crypto” or “digital assets” was noticeably absent from the statement made by Harris’ senior campaign advisor, Nelson.

From my perspective as an analyst, I find myself aligning with Adam Cochran, the visionary behind Cinneamhain Ventures, who views this particular move as a promising initial action, given the circumstances.

Cochran acknowledged the community’s frustration over the absence of specific actions or policies related to Harris’ campaign regarding cryptocurrency. Yet, he urged everyone to appreciate that this is the first instance where Harris’ campaign has formally addressed crypto in any way. However, his efforts to express optimism on the matter faced criticism.

Detractors swiftly countered Cochran’s optimism, highlighting that the previous four years had not provided substantial backing for the crypto sector from Harris. They contend that her behavior – or rather inaction – carries a more potent message than any ambiguous pronouncements from her campaign group.

Some people have directly wondered why Harris hasn’t taken any actions to aid the industry yet, considering her role as Vice President.

As a crypto investor, I’m eagerly awaiting clear, practical policy proposals from the Democratic candidates. Until then, their words are met with a healthy dose of skepticism within our community, as we’ve often felt overlooked in the past. Kamala Harris has made her stance known, but it will take more than just one move to win over a skeptical crowd like us.

What do experts think?

To gain a deeper understanding of the potential impact of Harris’ emerging stance on crypto, crypto.news spoke with two experts on the subject.

Nick Anthony, a policy analyst from the Cato Institute, offered a candid perspective on Harris’ position. Anthony highlighted the challenges Harris faces, telling crypto.news that while some Democrats have succeeded in maintaining a bipartisan approach to crypto policy, Harris still has much to prove: 

As a longtime advocate for technological innovation and financial inclusion, I have closely followed the evolving landscape of cryptocurrencies and their potential impact on our economy. Over the past few years, individual Democrats have made concerted efforts to keep crypto policy bipartisan, recognizing its transformative potential while also addressing legitimate concerns about regulation and consumer protection. However, in light of my own experiences working in government and understanding the importance of clear, decisive leadership, I believe that Vice President Harris needs to take an official stance on crypto policy herself.

The phrase “Operation Choke Point 2.0” is often used to describe the ongoing perceived attempt to restrict cryptocurrency businesses within the U.S., disguised as typical regulatory enforcement. Many in the industry believe this action not only hinders innovation but also misuses and distorts the intent of the law, implying an unfair and manipulative approach.

Speaking from my perspective as a crypto investor, I find myself echoing the sentiments expressed by Nitin Gaur, co-founder and CTO of Stealth Startup, who recently shared his apprehensions about the current government’s stance on cryptocurrencies in an interview with crypto.news.

As an analyst, I find it concerning how the current administration seems to be waging an unfair battle against cryptocurrencies through their tactics, reminiscent of Operation Choke Point 2.0. This approach appears to be more about hindering the expansion of this industry rather than addressing any specific issues with cryptocurrency as a digital currency. Instead, it’s about a revolutionary technology that is striving to revolutionize the trust system and coordination mechanisms to expedite transaction speed, moving us forward in the realm of financial technology.

He stressed the need for meaningful policies that should consider the intersections of technology, including AI, blockchain, and quantum computing, which have the potential to transform not just the financial sector but other fields as well. 

Gaur cautioned that the present government has overlooked all related aspects and solely concentrated on the ‘money’ aspect of the problem; they should devote time to create substantial policies instead.

There’s a consensus among experts that moving forward necessitates more than vague declarations. Currently, the crypto community is treading with caution, eagerly observing if Harris can indeed set her proposals apart from those currently in power.

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2024-08-23 13:51