In American politics, issues on which the two sides have not yet established a firm position are rare, representing a significant opportunity for whoever acts first. In 2021, one of those areas is the regulation of cryptocurrencies.
Cryptocurrency may still be a minor issue for some voters, but with the crypto market now valued at over $ 2.5 trillion, its importance will only grow in importance, both in economic and electoral terms. Additionally, our research team at Redfield & Wilton Strategies recently discovered that many voters are already aware of cryptocurrency, which makes the political stakes even higher.
We surveyed nearly 10,000 Americans in ten politically important US states, and what we found was that very few respondents, ranging from 8% in Florida to 14% in Georgia, had not heard of it. of cryptocurrency. Meanwhile, more than four in ten respondents in key states said they had read or heard “a moderate amount” or “a lot” about the topic.
And voters aren’t just aware of cryptocurrency; they are also receptive to it. Even without being exposed to any campaign on the issue, about a third of Americans in all states polled, ranging from 28% in Arizona to 37% in Texas and Wisconsin, would vote “yes” on a ballot asking whether the cryptocurrency should be legal tender in their state.
Whichever party wishes to catch these receptive voters, it must act quickly, not only to beat the other party in the fist, but also to anticipate legislation that would prove difficult to overturn if enacted.
Namely, the Biden administration, under pressure from Treasury Department officials, recently sought to introduce stricter federal rules for cryptocurrency reporting and trading, apparently in an effort to enforce tax compliance. Yet the effort to include such rules in the recently passed infrastructure bill failed, opening up a new opportunity for either party to win voters who would be more willing to embrace an environment. legal and regulatory open and favorable to cryptography.
In particular, the Republican Party could take the initiative at the national level, having already put in place a crypto-friendly legal framework at the local level. In recent years, Republican lawmakers in Wyoming have introduced legislation that allows banking institutions to legally operate with cryptocurrency, resulting in the relocation of several industry companies, Ripple and Kraken, to the Western state. For the GOP, this local success could be a microcosm of a nationwide story.
Indeed, our research reveals that a significant proportion of Americans, from 25% in Arizona to 42% in Texas, say they would support their state introducing legislation that provides a legal framework for cryptocurrency and encourages investors. in cryptocurrency to operate as Wyoming has already done.
Surprisingly, support for Wyoming emulation is highest among registered Democratic voters. It’s an opportunity for the Republican Party to win over new voters, as well as a reason for the Democratic Party to back down on the issue.
More problematic for the GOP, the party itself seems divided on the issue. While Ted Cruz notably led efforts to remove the cryptocurrency provisions from the infrastructure bill, former President Donald Trump called Bitcoin a “scam” and said he considered them to be a scam. cryptocurrencies “like a disaster to come”.
A major stumbling block for all policymakers has been Bitcoin’s close association, the value of which is subject to speculation and wild fluctuations, with the subject of cryptocurrencies. Strong majorities in all surveyed states say they have heard of Bitcoin, but few have heard of other cryptocurrencies. Public awareness of stablecoins like the world’s largest, Tether, is currently limited.
It is also an opportunity. The more widespread use of stable cryptocurrencies like Tether would ensure that transactions currently settled in a local currency could soon be effectively settled in US dollars. But if the United States were to backfire on dollar-backed stablecoins, this move would likely leave a monetary vacuum, which another player – perhaps China, with its central bank-issued digital currency – would be more than enough. ‘happy to fill. Supporting cryptocurrencies linked to the United States thus becomes a means of containing the influence of China and others, an argument likely to appeal to voters from all political backgrounds.
Capturing voters in favor of a crypto-friendly regulatory framework is a major opportunity for both parties in the United States. But this advantage is time sensitive. The first party to get there will gain a long-term advantage, both political and economic.
Louisa Idel is the Insights Manager at Redfield & Wilton Strategies.
The opinions expressed in this article are those of the author.