Bitcoin enters political agenda as it can no longer be ignored

Updated on: 11 September 2023

Linas Kmieliauskas
Contributor

Are you a politician seeking election? Start discussing Bitcoin (BTC) and crypto. These topics are becoming increasingly prominent in various election cycles, including the US presidential race. Furthermore, they’re gaining international significance as countries vie for BTC and crypto-related investments.

The BTC card is frequently played when critiquing current governments, particularly central banks, their monetary policies, and plans for controversial central bank digital currencies (CBDCs). Politicians who employ this tactic also emphasize the potential benefits that Bitcoin, crypto, and decentralized finance (DeFi) technologies can bring to society. However, those in power, such as the current administration of the US president, sometimes exhibit less enthusiasm and propose regulations that could impede the growth and innovation within this emerging sector.

In any case, the tide is changing, and the debates we now witness in the political arena would have been unimaginable just a few years ago.

Bitcoin candidates

A recent example that has garnered significant attention, especially within the Bitcoin community, originates from inflation-plagued Argentina. In August, libertarian candidate Javier Milei emerged victorious in the presidential primaries, setting the stage for the general election in October. If he secures victory, the G20 club of the world's largest economies would see its first-ever president openly supporting Bitcoin. Milei asserts that Bitcoin "represents the restoration of money to its original creator: the private sector." Furthermore, he contends that the Argentinian central bank is a fraudulent institution, accusing politicians of deceiving the public through inflationary taxation and advocating for the closure of the bank.

Similar sentiments can also be observed in the United States, where presidential candidate Robert F. Kennedy Jr. stands out as perhaps the most ardent supporter of Bitcoin and critic of CBDCs among all the candidates. Kennedy has personally invested in BTC and underscores the transparency and simplicity of Bitcoin in contrast to the current financial and monetary systems. He emphasizes the need to "decentralize" democracy as well. According to this controversial politician, known for his government conspiracy theories and vaccine critiques, CBDCs could be susceptible to government abuse.

However, unlike Milei's leadership campaign, recent polls suggest that Kennedy is unlikely to secure a place in the White House in the foreseeable future.

While another Bitcoin advocate, Miami Mayor Francis Suarez, who is striving to transform the city into the "crypto capital" of the US, withdrew from the presidential race, some other candidates are also leveraging Bitcoin and crypto as additional aspects of their campaigns, including Ron DeSantis and Vivek Ramaswamy.

Meanwhile, the two primary contenders, former President Donald Trump and current President Joe Biden, are adopting somewhat different approaches. Trump hasn't been an outspoken advocate for Bitcoin and crypto or recently expressed his stance on these technologies, but he possesses his own collection of NFTs (non-fungible tokens). Recently, Trump disclosed that he earned nearly $8 million from it and, at one point, held almost $3 million in ethereum (ETH).

Here are several items from Trump's NFT collection:

Source: Opensea.io

The Joe Biden administration is renowned for its unfavorable stance on Bitcoin and crypto-related policies, primarily in relation to taxes. For instance, the administration proposed a 30% tax on Bitcoin mining, though it did not ultimately pass.

On the other hand, Eric Adams, the current Mayor of New York, made pro-Bitcoin commitments during his 2021 election campaign. He even converted his initial mayoral paycheck into BTC and ETH.

Nevertheless, numerous other countries also boast politicians who are favorable toward Bitcoin and crypto.

In Thailand, Srettha Thavisin, a real estate developer who pledged to provide every citizen aged 16 and above with $300 worth of a yet-to-be-created digital token, has now assumed the role of Prime Minister in the country. Meanwhile, in El Salvador, the first nation to adopt BTC as legal tender, President Nayib Bukele enjoys strong support in the polls. However, this support may be attributed more to his anti-crime policies rather than his stance on Bitcoin adoption.

In Europe, Prime Minister Rishi Sunak of the UK aspires to transform the country into a crypto hub, while Prime Minister Fumio Kishida of Japan demonstrates support for the local Web3 ecosystem. (Web3 is a somewhat vague term, typically denoting blockchain-powered decentralized web solutions.)

What's behind this sudden shift?

Why are Bitcoin and crypto emerging as increasingly prominent topics in the political arena, expanding the boundaries of the so-called Overton window and the scope of political discourse? Furthermore, the portrayal of these technologies is taking on a progressively positive tone.

The answer is straightforward: as more and more voters and even politicians themselves embrace Bitcoin and crypto technologies, it's becoming increasingly difficult to overlook them, especially if you aim to secure as many votes as possible. On the flip side, it appears that those voters who oppose these technologies are less vocal, and these issues hold less significance for them.

In a recent podcast, Dennis Porter, a Bitcoin advocate and the CEO and Co-founder of Satoshi Action Fund, observed that Bitcoin is gaining more support from right-leaning and libertarian voters, while he also noted some movement on the left.

This spring, YouGov conducted interviews with over 15,000 individuals aged 18 to 65 across 15 countries in North and South America, Europe, Africa, and Asia regarding cryptocurrencies. The results revealed that although still considered a niche technology, cryptocurrencies are already being used by a substantial segment of voters. Ignoring or antagonizing these voters is a risky proposition, and adopting more favorable policies could potentially secure additional votes.

At the same time, narratives are also changing when it comes to Bitcoin mining, which was misunderstood and criticized for its electricity consumption. Now, even one of the top consultancies, KPMG, acknowledges potential ESG (Environmental, Social, and Governance) benefits of Bitcoin mining, helping politicians to endorse this technology too.

‘Voting with your money’

Furthermore, as potential donors increasingly expose themselves to Bitcoin and crypto, this provides new incentives for politicians to embrace these new technologies. For instance, the world's largest investment manager, BlackRock, is preparing to enter the Bitcoin arena by planning the launch of a BTC exchange-traded fund (ETF) in the US, pending approval from the Securities and Exchange Commission. It's easy to imagine the impact such a powerhouse could have on local politics in the US.

As Margot Paez, a Bitcoin mining consultant, said in a separate podcast, “Bitcoin is a political act, though, so you're just not engaging in the political system, but you are being political by deciding to use Bitcoin, build on Bitcoin, create economies around Bitcoin, mine Bitcoin. I think all of that is a political act, and it's an act of defiance, it's a political statement, and you are voting with your money.”