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Biden Builds a Crypto-Friendly Team for His First Cabinet

Biden Builds a Crypto-Friendly Team for His First Cabinet

Published: November 14th, 2020

While outgoing President Donald Trump says he’s never been a fan of cryptocurrencies, the next resident of the White House seems more amendable to digital currencies.

President-elect Joe Biden is building a cabinet team comprised of members with pro-crypto leanings. That suggests the incoming government could create an environment where crypto can move a step further toward mainstream adoption.

Biden’s public pronouncements suggest he’s ambiguous on the issue, but as ever in politics, actions speak louder than words.

A full plate of issues

The president-elect already has lots on his plate as he moves ahead with transition plans, from the COVID-19 pandemic to exploding unemployment and dealing with the fallout from Trump’s chaotic reign, both domestically and internationally.

Still, Biden's arrival could have a significant impact on the cryptocurrency industry as it matures and grows, both inside America and globally.

Here’s a look at what Biden’s arrival and his cabinet picks could herald for Bitcoin and its digital brethren.

The first crypto cabinet?

The most bullish member of Biden’s team will be Andrew Yang. A tech entrepreneur with progressive ideas about the role of blockchain technology and cryptocurrency. Yang ran on a platform of universal basic income for all Americans and proposed implementing a blockchain-based voting system. After ending his own bid for the presidencey, he launched a non-profit called Humanity Forward, which promotes ‘crypto-adjacent’ ideas like UBI.

Yang has written about cryptocurrencies and what he sees as governments’ inability to understand and leverage the technology for societal benefit. That all suggests he will be a leading voice in the Biden government for developing sensible regulation for crypto and blockchain.

‘Digital assets like cryptocurrencies have snowballed, and they now represent a huge amount of economic activity,’ he wrote in 2019, ‘outstripping the government’s ability to respond’. “No sensible national framework for regulating digital assets has been created, and several federal agencies are claiming jurisdiction with conflict between them likely, more creating confusion.’

Biden’s running mate and incoming vice-president Kamala Harris isn't on record as having specific views on Bitcoin and cryptocurrency. Her team, however, includes former Chief Technical Officer of the Sacramento Kings Ryan Montoya. The Kings have a reputation as the NBA’s most tech-savvy and crypto-friendly team. Montoya is Harris’ Director of Scheduling and Advance, so will have the VP’s ear on a daily basis.

Industry luminaries like Tim Darper seem to agree that Harris other policy leanings would fit neatly with any moves toward a more crypto-friendly legal framework in the US. Speaking to journalists in August he said that Harris’ record in California politics suggest she will understand crypto’s value and economic potential.

One name pegged as a potential new Treasury Secretary is Senator Elizabeth Warren. `While she’s made a reputation as a fierce Wall Street critic and led the creation of the Consumer Financial Protection Bureau in the Obama administration, Warren seems to have balanced views on crypto. She’s commented several times about the potential for consumers to be defrauded by shady ICOs or led astray on crypto investments due to lack of understanding.

However, in a 2018 Senate speech, she noted the 'productive aspects of crypto’ and the need for proper consumer protections as a necessary condition for the growth of digital currencies.

Another name being suggested who would likely be in the pro-crypto camp is Gary Gensler, former chairman of the Commodity Futures Trading Commission. Gensler is being considered for an advisory role on new Wall Street regulation.

Gensler’s background includes extensive academic work with blockchain and crypto. He taught a course at MIT about the use of Bitcoin and blockchain in finance. In the past, he's described Bitcoin as a ‘catalyst for change’, and wants to bring oversight of crypto exchanges into clear and sensible public policy frameworks.

Clarifying crypto markets with consistent regulation

Biden's transition team is considering current Federal Reserve Governor Lael Brainard as a potential Treasury Secretary. Her appointment could be a net positive for the crypto industry.

Brainard has demonstrated familiarity with blockchain technology and shown interest in digital currencies run by central banks. Brainard will also have an opportunity to fill the many positions left open by President Trump at financial regulatory agencies. That could drive new progressive policy formation and more approval of crypto instruments.

On current policy commitments, Biden’s proposed annual tax plan would impact any crypto holder with $400k or more, and high-income holders with assets of $1 million or higher in particular.

Crypto holders could see their income tax rate on capital gains rise from 37 per cent to 39.5 per cent, with all capital gains on income over $1M taxed at 39.5 per cent. That wouldn’t affect the vast majority of crypto users, however, and only suggests a slight increase for those making over $400k each year.

Flirting with tomorrow’s finance

With Senate and House majorities still in the balance, Biden’s power to influence cryptocurrency as president remains to be seen. Two runoff elections in Georgia are still underway, and the new composition of the Supreme Court could limit Biden’s scope for action. On balance, however, analysts seem to believe the Biden administration will be crypto-positive.

If history is any guide, people in Biden's camp have at least flirted with the idea of crypto-friendly policies as far back as 2016, when a pro-Biden political action committee (PAC) called Draft Biden 2016 did take Bitcoin donations. However, Biden ultimately dropped his presidential bid, and the PAC has since disbanded.

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