What The Biden Administration Means for Cryptocurrency & Blockchain Industry
The general tendency is positive
The industry generally expects that the Biden administration will be more friendly to the blockchain industry and that regulation will be more loose and favorable to the industry. The main basis is that:
(1) There are many supporters of digital currency on Biden’s team.
For example, Biden’s vice president-elect, current U.S. Senator and former California Attorney General Kamala Harris, who is on a team that includes former Sacramento Kings CTO Ryan Montoya, known as the most tech-savvy and cryptocurrency-friendly team in the NBA. There is also former Democratic presidential candidate Andrew Yang who is undoubtedly the most bitcoin-friendly member of the Biden campaign. Biden has made it clear that he accepts digital currency donations, which seems to indicate that he will be a new U.S. president who is not opposed to cryptocurrencies.
(2) The Biden administration’s economic think tank is friendly to digital currencies.
Biden has asked Gary Gensler for advice on Wall Street issues. Gensler, a former Goldman Sachs executive and chairman of the U.S. Commodity Futures Trading Commission, knows a lot about the wide range of crypto applications and is a senior advisor to the MIT Media Lab’s Digital Currency Initiative.
(3) Democratic policy tendency is better than Republican.
Trump has publicly opposed Bitcoin, and there is a good chance that Biden will support what Trump opposes, so the Bitcoin and cryptocurrency markets will be greeted with positive policies. Democratic administrations have always been seen as more focused on technology and emerging areas. Biden just announced a $1.9 trillion plan, which is good for Bitcoin and Ether, which are known as “digital gold” and have safe-haven functions.
Some projects may come to fruition during Biden’s term
The largest fund in the digital currency market, Grayscale, now has a position with a market cap of over $20 billion. And Catherine Wood, the ARK stock goddess who has been popular in the U.S. stock market these past few years and is known as the female version of Warren Buffett, is also a big supporter of Bitcoin. She has allegedly been holding bitcoin since the price was $250 and believes it will still have room to grow dozens of times over. News of the upcoming IPO of Coinbase, the largest digital currency in the U.S., has also been interpreted by the industry as a sign that regulation is fully embracing the digital asset industry and that digital currency assets are moving from being fringe assets to being part of the mainstream. In addition, there are several projects that may land:
1. Chances of Bitcoin Exchange Traded Fund (BTC ETF) getting approved will increase.
2. Facebook’s Diem (formerly Libra) is likely to pass.
3. Digital dollars are also likely to come out.
4. There will be innovations in digital currency regulation.
5. The financial discourse of Wall Street and Silicon Valley will strengthen again.
6. Government-regulated STOs are likely to grow significantly.
What is uncertain is Yellen’s view
Biden has not commented on the blockchain, presumably because U.S. society is too torn and problematic to have much experience yet to take into account the cryptocurrency/blockchain industry. Biden was elected as president and he nominated Yellen as the new US Treasury Secretary. The U.S. cryptocurrency/blockchain industry policy is largely dependent on Yellen’s opinion.
Yellen is a former Federal Reserve Chairman and Keynes loyalist. Most recently, Yellen said many cryptocurrencies are used primarily for illicit financing, at least in a transactional sense, and she believes the U.S. needs to look at ways to curb their use and ensure that anti-money laundering does not occur through these channels. Yellen has dismissed Bitcoin at various points, but she still says she doesn’t want to overregulate the cryptocurrency space. In its place, she will oversee a series of proposed regulations through the financial crimes enforcement network when she takes office, including a controversial rule requiring exchanges to collect and store counterparty information for uncustodied wallets.
The Federal Reserve has been not very friendly to bitcoin. Satoshi Nakamoto went missing in late 2010, and there is a possibility that he was hiding from regulatory sanctions. The failure of two congressional hearings on the vividly remembered Facebook Libra shows that the U.S. government is deeply entrenched in its resistance to the blockchain industry. Because the blockchain advocates the concept of self-currency and self-financing, moving the cheese of traditional finance.
The Federal Reserve and finance is one of the three fundamental interests of the U.S. state (the other being the U.S. military and the Internet). The U.S. economy is very liberal, but monetary and financial is very conservative. However, if the U.S. hierarchy recognizes that digital currencies are enhancing dollar hegemony, not weakening it, Yellen and Biden, among others, will aggressively embrace blockchain. And the recent renaming of Facebook’s Libra to Diem and its embrace of regulation by pegging it only to the dollar would make U.S. policy more aggressively support blockchain.
In addition, the blockchain industry will also have the sense to cater to the U.S. government policy for more support.
Article from Zhu Youping, a blockchain economist
Translated by Yang(Mengyan Finance)