2024 election showdown: will votes decide crypto’s fate?

How
do
the
election
outcomes
in
India
and
the
U.S.
affect
global
crypto
policies,
with
India’s
crypto
adoption
growing
and
the
U.S.
maintaining
its
dominance?

The
ongoing
elections
in

India
and
upcoming
elections
in
the

U.S.
could
have
profound
implications
for
the
crypto
market,
given
the
distinct
roles
both
countries
play
in
the
world
economy. 

India,
with
its
massive
population
of
over
1.4
billion
people,
has

emerged
as
the
largest
crypto
hub.
As
of
2023,
India
boasts
93.5
million
crypto
owners,
representing
6.55%
of
its
population. 

Meanwhile,
the
U.S.,
home
to
nearly
340
million
people,
has
the
largest
crypto
market
by
ownership
percentage,
with
15.56%
of
its
population—around
52.9
million
individuals—holding
digital
assets.

In
the
U.S.,
more
than
15%
of
American
crypto
owners

possess
over
$10,000
in
crypto
assets.
The
political
influence
of
this
group
is
growing,
with
1
in
5
Americans
now
owning
digital
assets. 

This
demographic
is

diverse:
22%
identify
as
Democrats,
18%
as
Republicans,
and
22%
as
Independents.
Additionally,
60%
are
Gen
Z
or
Millennials,
and
41%
are
minorities. 

This
diverse
crypto
voter
bloc
could
play
a
key
role
in
the
2024
elections,
especially
in
swing
states
where
narrow
margins
often
decide
elections.

In
contrast,
India’s
general
election
in
2024
is
not
expected
to
bring
immediate
changes
to
crypto
policy. 

Prime
Minister
Narendra
Modi,
who
is
seeking
a
third
term,
is
likely
to
continue
the
current
restrictive
stance
on
crypto,
including
the
1%
tax
deducted
at
source
on
transactions. 

Despite
the
country’s
rapid
adoption
of
digital
assets,
crypto
remains
a
niche
issue
for
the
majority
of
Indian
voters,
overshadowed
by
more
pressing
economic
and
social
concerns.

Changing
stance
of
political
leaders
in
the
U.S.
about
crypto

The
political
environment
in
the
U.S.
is
experiencing
a
turbulent
shift
regarding
crypto.
Both
former
President
Donald
Trump
and
current
President
Joe
Biden
have
altered
their
stances
in
ways
that
could
dramatically
influence
the
crypto
market. 

To
understand
these
changes
better,
crypto.news
gathered
exclusive
insights
from
industry
experts
Mihał
Popieszalski,
CEO
of
MatterFi;
Tim
Delhaes,
CEO
of
Grindery;
and
Nishal
Shetty,
CEO
of
WazirX.

Donald
Trump’s
presidential
campaign
recently
announced
it
would
begin
accepting
donations
in
crypto,
marking
a
stark
change
from
his
previous
skepticism
toward
digital
assets.

I
am
not
a
fan
of
Bitcoin
and
other
Cryptocurrencies,
which
are
not
money,
and
whose
value
is
highly
volatile
and
based
on
thin
air.
Unregulated
Crypto
Assets
can
facilitate
unlawful
behavior,
including
drug
trade
and
other
illegal
activity….

—
Donald
J.
Trump
(@realDonaldTrump)

July
12,
2019

The
campaign’s
fundraising
page
now
allows
any
federally
permissible
donor
to
contribute
using
various
crypto
assets,
including
Bitcoin
(BTC),
Ethereum
(ETH),
and
US
Dollar
Coin
(USDC),
as
well
as
low-value
coins
like
Shiba
Inu
(SHIB)
and
Dogecoin
(DOGE). 

This
decision
seems
to
appeal
to
a
core
group
of
young
male
voters
who
are
increasingly
likely
to
invest
in
digital
assets.

Trump’s
embrace
of
cryptocurrency
isn’t
entirely
new.
He
has
already
received
millions
in
cryptocurrency
through
his
Trump
Digital
Trading

Cards
non-fungible
token
(NFT)
projects.

Popieszalski
provided
insights
into
the
political
implications
of
this
decision:

“The
U.S.
political
climate
has
seen
shifts
over
time,
particularly
with
increasing
polarization
and
the
rise
of
populism.
Recently,
crypto
has
emerged
as
a
new
frontier
in
the
political
era,
influencing
policy
discussions
and
campaign
strategies.”

On
the
other
hand,
the
Biden
administration
appears
to
be
preparing
for
a
strategic
pivot
on
crypto
regulations,
potentially
aligning
closer
with
the
digital
asset
community
ahead
of
the
November
election. 

This
speculation
follows
the
recent
approval
of
a

spot
Ether
ETF,
a
massive
change
in
stance
by
the
Securities
and
Exchange
Commission
(SEC). 

It’s
hard
to
believe
this
SEC
would
do
us
any
favors
like
approving
the
spot
ETH
ETF.

But
policy
is
politics,
and
crypto
has
been
winning
the
political
battle
for
months.

Maybe
the
Biden
camp
saw
how
many
voters
Trump
could
win
with
one
pro-crypto
comment
and
decided
to
pivot.

—
Jake
Chervinsky
(@jchervinsky)

May
21,
2024

Haseeb
Qureshi,
Managing
Partner
at
Dragonfly,
believes
that
Biden
is
likely
to
soften
on
crypto
to
avoid
losing
votes
in
a
tight
race,
stating,
“He
doesn’t
want
to
lose
votes
in
a
tight
race
over
what
is
ultimately
a
minor
issue
to
him.”

Been
saying
for
weeks
that
Biden
is
going
to
soften
on
crypto
going
into
the
election.
He
doesn’t
want
to
lose
votes
in
a
tight
race
over
what
is
ultimately
a
minor
issue
to
him.

ETF
is
the
first
sign
of
this—I
think
we
see
other
agencies
also
softening
next
few
months.

—
Haseeb
＞|＜
(@hosseeb)

May
21,
2024

Delhaes
mentioned:

 “The
presidential
race
is
on
such
margins
that
candidates
are
trying
to
address
all
sorts
of
niches,
including
crypto
enthusiasts.”

Popieszalski
further
commented: 

“The
sudden
positive
sentiment
around
spot
ETH
ETFs
likely
reflects
acceptance
of
crypto
within
financial
markets
and
regulatory
bodies.
Approval
of
such
ETFs
suggest
that
regulatory
agencies
are
responding
to
political
and
economic
pressures.”

However,
this
shift
is
not
without
its
complexities.
Delhaes
noted:

 “The
approval
of
spot
ETH
ETFs
suggests
a
maturation
of
the
crypto
market…
However,
it
also
raises
concerns
about
political
motives
aiming
to
exert
greater
control
over
a
decentralized
market
through
regulatory
means.”

Nishal
Shetty,
CEO
of
WazirX,
added:

“The
US
is
definitely
at
an
advantage
in
terms
of
strong
support
from
political
parties
despite
hurdles
from
the
SEC.
Crypto
strategy
is
a
strong
part
of
the
agenda
of
political
parties
in
the
US,
unlike
India
where
crypto
policies
aren’t
as
big
a
concern
among
voters.”

India’s
influence
on
the
crypto
world 

Crypto’s
importance
as
an
election
issue
in
India
is
minimal.
For
most
voters,

Web3
and
related
technologies
remain
complex
and
largely
unknown. 

Even
India’s
steep
tax
on
crypto
transactions
(1%
deducted
at
source
for
each
transaction)
is
unlikely
to
significantly
influence
the
upcoming
election. 

Instead,
pressing
issues
like
unemployment,
religious
tensions,
minority
rights,
electoral
bonds,
institutional
independence,
and
agrarian
policies
dominate
the
political
discourse.

Meanwhile,
neither
the
major
parties,
Prime
Minister
Narendra
Modi’s
Bharatiya
Janata
Party
(BJP)
nor
the
Indian
National
Congress
(INC),
has
mentioned
cryptocurrency,
blockchain,
or
Web3
in
their
manifestos. 

However,
this
doesn’t
necessarily
mean
they
lack
plans
for
the
ecosystem.
Political
parties
in
India
often
use
indirect
language
to
address
crypto-related
topics. 

For
example,
the
BJP’s
manifesto
mentions
educating
senior
citizens
about
digital
scams
and
taking
action
against
threats
to
digital
sovereignty.
The
INC
talks
about
digital
ledgers
for
agricultural
transactions
and
addressing
cybersecurity
issues
that
could
threaten
India’s
digital
financial
infrastructure.

During
Modi’s
second
term,
his
administration
introduced
several
crypto-related
policies,
including
a
30%
tax
on
profits
from
digital
asset
sales,
no
offsetting
of
losses,
and
a
1%
tax
deducted
at
source
for
every
transaction. 

Citing
ways
to
mitigate
India’s
lackluster
approach,
Shetty
mentioned:

“Incentivising
aspiring
developers,
institutional
investors,
VCs
and
builders
of
Web3
to
come
up
with
real
world
solutions
for
domestic
market
challenges
and
lowering
taxation
rate
of
digital
asset
ownership
are
some
of
the
steps
that
can
be
taken
to
ensure
that
India
is
at
the
forefront
of
blockchain
revolution
that
is
currently
sweeping
the
world.”

Meanwhile,
regardless
of
the
election
outcome,
India’s
Web3
policies
are
expected
to
remain
largely
unchanged
in
the
near
future.
If
Modi
wins,
his
current
policies
will
likely
continue,
and
any
updates
to
crypto
policy
won’t
be
an
immediate
priority.
The
opposition,
if
it
wins,
will
have
other
urgent
issues
to
address
first. 

Shetty
further
added:

“India’s
crypto
ownership
is
impressive
but
it
has
a
long
way
to
go
before
it
can
be
a
leader
in
the
same.
The
pace
might
not
be
as
rapid
as
the
community
had
expected
but
over
the
last
couple
of
years,
regulators
have
been
open
to
two-way
dialogues
and
discussions
with
industry
stakeholders.

How
U.S.
election
results
could
influence
crypto
regulations

The
upcoming
U.S.
elections
could
largely
impact
cryptocurrency
regulations,
depending
on
whether
Donald
Trump
or
Joe
Biden
wins.
Each
administration
has
a
different
approach
that
could
shape
the
future
of
the
crypto
market.

According
to
Popieszalski:

“A
Trump
administration
might
pursue
a
more
crypto-friendly
regulatory
environment,
promoting
innovation
and
investment
in
the
sector.” 

Trump’s
moves
to
accept
crypto
donations
and
his
recent
history
with
digital
assets
show
his
support
for
the
industry.
This
approach
could
attract
young,
tech-savvy
voters
who
are
active
in
the
crypto
space.

In
contrast,
the
Biden
administration’s
cautious
approach
seems
to
have
reversed.
The
SEC’s
approval
of
a
spot
Ether
ETF
indicates
a
possible
softening
of
the
administration’s
stance
on
crypto. 

Despite
this,
Biden’s
administration
will
likely
emphasize
consumer
protection
and
financial
stability,
leading
to
more
stringent
regulations. 

Popieszalski
notes:

 “A
Biden
administration
might
emphasize
consumer
protection
and
financial
stability,
potentially
resulting
in
more
stringent
regulations.” 

Delhaes
echoing
Popieszalski’s
words
said: 

The
U.S.
will
likely
maintain
its
influence
on
international
crypto
regulations
regardless
of
the
election
outcome.
If
Biden
wins,
expect
a
continuation
of
current
regulatory
approaches.
If
Trump
wins,
the
focus
might
shift
to
other
issues,
affecting
the
pace
of
international
crypto
regulation.”

Meanwhile,
the
U.S.
House
of
Representatives’
“Financial
Innovation
and
Technology
for
the
21st
Century
Act”
reflects
bipartisan
support
for
technological
innovation
in
the
digital
assets
space.
This
bill
aims
to
foster
advancements
in
the
crypto
sector. 

Shetty
suggested
the
importance
of
regulatory
clarity
and
a
strong
domestic
Web3
ecosystem,
stating:

“Indian
leaders
need
to
adopt
a
similar
approach
towards
regulatory
clarity
irrespective
of
which
administration
comes
to
power.
The
country
needs
to
ensure
a
robust
domestic
web3
ecosystem
with
special
focus
on
empowering
the
youth
to
explore
the
technology
and
build
careers
in
the
same
field
to
concentrate
efforts
in
the
country’s
Web3
development
agenda.”

Whether
it’s
Trump
or
Biden,
the
ripple
effects
will
be
felt
worldwide.
And
with
India
watching
closely,
their
response
could
set
the
stage
for
a
new
era
in
global
crypto
regulation.