How can we guarantee the future of the crypto industry?

There are many ways — community building, supporting good Web3 projects, educating others, incentivizing developers — or simply electing pro-crypto leaders to key government positions. Come November, the U.S. will have the chance to make this a reality.

This year, the crypto industry is shelling out around $160 million or so in an all-out bid to get crypto-friendly candidates in seats of office. According to them, crypto has become so popular in the past years that candidates’ crypto policies are now a critical issue for millions of people. It certainly is for crypto investors steadily building their portfolios, but we have yet to find out just how much of a deciding factor crypto really is for the majority of voters.

As of now, most of the support from the crypto industry has been pouring into former president Donald Trump’s camp. Once upon a time, Trump called Bitcoin a scam, but now he’s apparently a big fan. Since the election campaign started, he’s been doubling down on the narrative of being America’s first crypto president and claims he’s waiting for Bitcoin to moon. Condemning current president Joe Biden’s “anti-crypto crusade” and vowing to put an end to the “persecution” on the industry has been one of the main talking points of his campaign. Trump even said he’d fire SEC head Gary Gensler, who has been instrumental in recent crackdowns and lawsuits against big names in the crypto space.

But with Biden bowing out of the race and Vice President Kamala Harris taking his place, the question of which candidate the crypto industry should root for is no longer as cut and dry as it used to be.

Because now, it seems Vice President Kamala Harris could be a crypto ally as well.

Pro-crypto voices in the Democrat camp have organized a “Crypto for Harris” campaign to chip away at the narrative that Trump is THE crypto candidate. And it’s been gaining traction lately. A former advisory board member of Binance and a former board member of Ripple are now part of her team. J.P. Thieriot, former CEO of crypto platform Uphold, is also placing his bets on Harris. As he sees it, there’s a real opportunity to shape her campaign’s stance on crypto. He believes that Trump is merely offering empty promises and that the industry can fare better if Harris wins the election.

Well, she may not be the advocate Trump positions himself as, and she didn’t attend the recent Bitcoin Conference where Trump proclaimed he’d turn the U.S. into the crypto capital of the world. But based on reports and media statements, her camp is in talks with key voices in the crypto space to rebuild relationships with the industry that were strained during the Biden administration. As the race heats up further, it seems the Democratic Party plans to break away from Biden’s tough restrictions and embrace more crypto-friendly policies.

During Biden’s term, lots of problems were popping up in the crypto space, from money laundering to cash grabs, the collapse of FTX, crypto being used for drug deals and terrorist funding, overhyped NFT investment baubles, crypto leaders on the run, etc. This led to tighter scrutiny, more involvement from the Securities and Exchange Commission and a more hostile attitude to all things crypto. Even diehard Democrats argue that SEC Chair Gary Gensler stepped out of line when handling crypto-related matters. Many believe the government simply went overboard. Unfortunately, this not only discouraged unscrupulous trading and investments but also put a damper on genuine innovation in the blockchain space.

After all, with too much restriction, innovation suffers. But without it, everything goes haywire.

For instance, fears of a U.S. recession and future of the economy post-election just triggered the worst crypto meltdown since the FTX crash of 2022. Ethereum went through its worst single-day drop since 2021, and derivatives traders suffered leverage wipeout. Granted, the rest of the global market isn’t faring any better; Japanese stocks were hit by the worst one-day plunge since 1987.

But what safety regulations could be implemented to protect crypto investors in such a time as this? How would crypto trading and investing be feasible for institutional investors in such an inherently volatile market? Who will ensure that banks and financial institutions educate their clients on responsible risk management? Since crypto was designed to be decentralized in the first place, should the government intervene at all?

Democrats are currently divided on the issue. Some high-profile Democrats like Senate Majority Leader Chuck Schumer and former House Speaker Nancy Pelosi seem to be more supportive of crypto lately, while others, like Sen. Elizabeth Warren, remain fiercely skeptical and argue that crypto poses major risks to consumers and the financial system.

As for Kamala Harris herself, let’s not forget her background as a prosecutor versus Trump’s background as billionaire businessman and one of the world’s richest people. For Trump, if crypto goes to the moon like he himself said it would, it’s definitely a boon. But for Harris, a former attorney general, without a doubt she’s also weighing in on crypto’s dark side—scams, international money laundering, and its role in drug deals, human trafficking, and the like. It would make sense for her to side heavily with the need to regulate crypto for the sake of cybersecurity and consumer protection while also being open to Fintech innovation—provided it’s done responsibly.

It also helps that Harris is strongly backed by Silicon Valley and has met with tech leaders to discuss the future trajectory of AI in the country. She was appointed as the head of Biden’s artificial intelligence task force to promote responsible AI innovation—and got called “Biden’s AI Czar” for that. She advocates for data privacy, responsible AI development, and antitrust regulations to prevent monopolies in Big Tech.

Right now, it appears that Harris’ campaign is trying to change the perception that the Democratic Party is overly restrictive towards businesses, particularly within the tech and financial sectors. Her own home state, California, is known for being a major tech hub, and the Biden administration’s approach toward business regulations did not sit well with tech leaders there. Rather than alienating Fintech entrepreneurs through overly rigid regulations, there now seems to be a push toward supporting responsible innovation by easing unnecessary regulations and updating existing policies. 

What the crypto sector is clamoring for is a clearer and better regulatory framework for investor and consumer protection created by parties with a broad understanding of all the sectors and stakeholders involved. But to achieve this, roundtable discussions between the government and crypto leaders to discuss policy making are a must. That's what many consider lacking from the Biden administration, and it’s something Harris’ camp is actively working on. They’re reaching out to Circle, Coinbase, Ripple, and other big names in the space to better understand the nuances of this technology and come up with well thought-out policies for the good of both the crypto industry and the greater economy. 

With more mutually-beneficial dialogues and roundtable discussions, the U.S. may just be on the brink of building a fair and comprehensive regulatory framework the industry has been clamoring for these past few years. Although it isn’t exactly easy to balance innovation with consumer protection and ensure financial stability while developing potentially world-changing technology, it’s definitely doable.

Will Harris turn out to be the crypto ally the industry is hoping for? Stay tuned.

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