Digital Assets Drive Biden And Trump’s Campaign Funding
The world of cryptocurrency is creeping into politics. But this isn’t the first time this crypto and politics has been discussed. A 2022 article from the Weforum highlights how digital assets like Bitcoin and Ethereum are becoming increasingly relevant in the U.S. Numbers from the article state that 53% of all Americans, 59% of Democrats, and 51% of Republicans believed that crypto is the future of finance. It’s also playing a significant role in political fundraising, with candidates and political action committees (PACs) accepting donations in these forms. In line with this, Presidential candidate Joe Biden recently announced he is considering accepting cryptocurrency donations in the upcoming election, creating a significant ripple in U.S. politics and the crypto community. Additionally, Biden’s administration is easing regulations on cryptocurrencies, sparking further debate about the government’s stance on digital currencies. This shift represents a significant departure from the cautious approach seen in 2022, when his administration issued an executive order aimed at establishing a comprehensive regulatory framework for cryptocurrencies.
Biden is not alone in leveraging cryptocurrency for political gain. Presidential candidate Donald Trump has ventured into the cryptocurrency market by attempting to launch his own official token, $DJT, on Solana. Trump, who once claimed in 2019 that crypto’s value is “based on thin air,” now touts himself as a potential “Crypto President” if elected. Why have these two major candidates started to adopt cryptocurrency as part of their political strategy when they were once cautious or dismissive of it before? Three main factors contribute to this shift. The first and most obvious contributor is that more and more voters are using cryptocurrency today.
The rise in cryptocurrency use among voters is significant. Millennials and Gen Z, who made up 40% of the votes in the last midterm elections, are likely to increase their influence in the upcoming election, with 41 million Gen Z voters eligible. These generations are more likely to own cryptocurrency than stocks. Moreover, overall crypto ownership in the country has increased between 20% to 40% since 2022. Candidates are aiming to capitalize on this growing demographic.
Candidates may have also been influenced by trends in other countries, such as El Salvador, where President Nayib Bukele’s pro-crypto policies, including adopting Bitcoin as legal tender has contributed to his landslide re-election victory. Lastly, there is speculation that cryptocurrencies could serve as a loophole for campaign donation restrictions. A recent analysis by Public Citizen highlights that Super PACs affiliated with the cryptocurrency industry have raised more than $102 million for the upcoming 2024 elections, mainly through direct corporate expenditures. This raises concerns about potential loopholes in contribution limits that could be exploited to support presidential candidates.
Ultimately, the question arises: will crypto backing become a standard strategy in future political campaigns? While the trend suggests this possibility, it is crucial to weigh the potential benefits and risks of such a strategy today and in the future.
The benefits include enhanced transparency and security due to blockchain technology, which ensures transactions are easily auditable and less susceptible to fraud compared to traditional finance systems. Cryptocurrencies also enable global accessibility, allowing supporters worldwide to contribute, thus broadening the fundraising base and tapping into a global pool of potential donors. However, there are inherent risks. The most obvious is that the regulatory environment for cryptocurrencies is still evolving, and political campaigns accepting crypto donations may face legal and compliance challenges, including future changes in regulations that could impact the legality or practicality of accepting such donations. There is also the risk of illicit contributions, as the pseudonymous nature of cryptocurrencies can make it easier for individuals to make contributions without revealing their true identities, potentially violating campaign finance laws. As mentioned earlier, super PACs are at the forefront of this risk, gaining millions of dollars in funds from corporate entities in the country to support their favored candidates. Lastly, cybersecurity risks, which have been occuring more often in the industry, can be a problem. Digital wallets used to store cryptocurrencies are vulnerable to hacking and theft, which could result in substantial financial losses and undermine public trust in the campaign’s security measures. Considering the massive funds going into these campaigns, a singular cybersecurity fault can lead to a candidate’s potential failure. phishing attacks and other cyber threats could target both the campaign and its donors, potentially leading to the unauthorized access and misuse of sensitive information.
The current state of cryptocurrency and politics is transforming the landscape of campaign fundraising, offering both opportunities and challenges. As candidates increasingly adopt digital assets, this could democratize campaign financing, giving voice to a broader, more diverse base of supporters who were previously marginalized by traditional funding mechanisms. However, this shift also demands rigorous debate and thoughtful regulation to navigate the complexities of this new frontier.
What if blockchain technology could not only fund campaigns but also enhance the transparency and accountability of our entire political system? Imagine a future where every vote and every donation is recorded on an immutable ledger, accessible and verifiable by anyone. This could revolutionize public trust in the electoral process, reducing the influence of dark money and ensuring that political contributions are transparent and above board. Yet, this vision is not without its challenges. The volatility of cryptocurrencies, the threat of cyberattacks, and the evolving regulatory landscape pose significant hurdles that must be addressed. As we stand on the brink of this new era, we must ask ourselves: Can we harness the power of cryptocurrency to create a more inclusive and transparent political system, or will we succumb to its risks? The answer to this question will shape the future of our democracy and redefine the relationship between technology and governance.
— — —
Exponential Era, your source for forward-thinking content about all things Web3 on Medium, powered by Epik. Epik is the the world’s leading IP licensing agency expert in Web3, AI, Metaverse, and the premier agency for brand integration in video games, leveraging the largest digital ecosystem and advanced cross-chain technology.
Follow our socials to stay up-to-date on the latest news and developments on partnerships and collaborations. Telegram, Twitter, Instagram, YouTube, and Official Website.
