Will cryptos fate be determined by votes in the 2024 election showdown

The impact of election results in India and the U.S. on global crypto policies is significant, as India sees a rise in crypto adoption while the U.S. maintains its leading position.

Table of Contents

Evolution of political leaders’ views on crypto in the U.S.
India’s influence on the crypto landscape
Potential effects of U.S. election outcomes on crypto regulations
The ongoing elections in India and the upcoming elections in the U.S. hold immense implications for the crypto market, given the pivotal roles both countries play in the global economy.

India, with a population exceeding 1.4 billion people, has emerged as the largest crypto hub. By 2023, India boasts 93.5 million crypto owners, constituting 6.55% of its population. On the other hand, the U.S., home to nearly 340 million people, leads in crypto ownership percentage, with 15.56% of its population—approximately 52.9 million individuals—holding digital assets.

In the U.S., over 15% of American crypto owners possess more than $10,000 in crypto assets. This diverse group, which includes 22% Democrats, 18% Republicans, and 22% Independents, is gaining political influence, with 1 in 5 Americans now owning digital assets. Additionally, 60% belong to Gen Z or Millennials, and 41% are minorities.

This diverse crypto voter bloc could play a crucial role in the 2024 elections, particularly in swing states where narrow margins often determine the outcome.

Conversely, India’s upcoming general election in 2024 is not expected to bring immediate changes to crypto policy. Prime Minister Narendra Modi, seeking a third term, is likely to maintain the current restrictive stance on crypto, including the 1% tax deduction at source on transactions. Despite the country’s rapid adoption of digital assets, crypto remains a minor issue for most Indian voters, overshadowed by more pressing economic and social concerns.

Evolution of political leaders’ views on crypto in the U.S.

The political landscape in the U.S. is witnessing a significant shift concerning crypto. Both former President Donald Trump and current President Joe Biden have adjusted their positions in ways that could have a profound impact on the crypto market.

To delve deeper into these changes, crypto.news sought exclusive insights from industry experts Mihał Popieszalski, CEO of MatterFi; Tim Delhaes, CEO of Grindery; and Nishal Shetty, co-founder of WazirX.

Donald Trump’s recent announcement that his presidential campaign will start accepting crypto donations marks a stark departure from his previous skepticism towards digital assets. The campaign’s fundraising page now allows federally permissible donors to contribute using various crypto assets, including Bitcoin (BTC), Ethereum (ETH), US Dollar Coin (USDC), as well as low-value coins like Shiba Inu (SHIB) and Dogecoin (DOGE). This move appears to resonate with a core group of young male voters who are increasingly investing in digital assets.

Trump’s embrace of cryptocurrency is not entirely new, as he has already received millions in cryptocurrency through his Trump Digital Trading Cards non-fungible token (NFT) projects. Popieszalski shared insights on the political implications of this decision:

On the other hand, the Biden administration seems to be gearing up for a strategic shift in crypto regulations, potentially aligning more closely with the digital asset community ahead of the November election. This speculation follows the recent approval of a spot Ether ETF, a significant change in stance by the Securities and Exchange Commission (SEC). Haseeb Qureshi, Managing Partner at Dragonfly, believes that Biden is likely to soften on crypto to avoid losing votes in a tight race, stating, “He doesn’t want to lose votes in a tight race over what is ultimately a minor issue to him.” Delhaes mentioned:

Popieszalski further commented:

However, this shift is not without its complexities. Delhaes noted:

Nishal Shetty, co-founder of WazirX, added:

India’s influence on the crypto landscape

The significance of crypto as an election issue in India is minimal, as Web3 and related technologies remain complex and largely unfamiliar to most voters. Even India’s high tax on crypto transactions (1% deducted at source for each transaction) is unlikely to have a substantial impact on the upcoming election. Instead, pressing issues like unemployment, religious tensions, minority rights, electoral bonds, institutional independence, and agrarian policies take center stage in the political discourse.

Both major parties in India, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) and the Indian National Congress (INC), have not mentioned cryptocurrency, blockchain, or Web3 in their manifestos. However, this does not mean they lack plans for the ecosystem, as political parties in India often use indirect language to address crypto-related topics.

For instance, the BJP’s manifesto includes educating senior citizens about digital scams and addressing threats to digital sovereignty, while the INC talks about digital ledgers for agricultural transactions and tackling cybersecurity issues that could jeopardize India’s digital financial infrastructure. During Modi’s second term, his administration introduced several crypto-related policies, including a 30% tax on profits from digital asset sales, no offsetting of losses, and a 1% tax deducted at source for every transaction. Shetty highlighted ways to enhance India’s lackluster approach:

Regardless of the election outcome, India’s Web3 policies are expected to remain relatively unchanged in the near future. If Modi secures victory, his current policies will likely continue, with updates to crypto policy not being an immediate priority. If the opposition wins, other pressing issues will take precedence. Shetty further added:

Potential effects of U.S. election outcomes on crypto regulations

The upcoming U.S. elections could have a significant impact on cryptocurrency regulations, depending on whether Donald Trump or Joe Biden emerges victorious. Each administration has a distinct approach that could shape the future of the crypto market. According to Popieszalski:

Trump’s acceptance of crypto donations and his history with digital assets signal his support for the industry, potentially attracting young, tech-savvy voters active in the crypto space. In contrast, the Biden administration’s cautious approach appears to be changing, with the SEC’s approval of a spot Ether ETF hinting at a possible softening of the administration’s stance on crypto. Despite this, Biden’s administration is likely to prioritize consumer protection and financial stability, leading to stricter regulations. Popieszalski notes:

Delhaes echoed Popieszalski’s sentiments:

The U.S. is expected to maintain its influence on international crypto regulations irrespective of the election outcome. If Biden wins, the current regulatory approaches are likely to continue. If Trump wins, the focus may shift to other issues, affecting the pace of international crypto regulation.

Meanwhile, the U.S. House of Representatives’ “Financial Innovation and Technology for the 21st Century Act” demonstrates bipartisan support for technological innovation in the digital assets space, aiming to foster advancements in the crypto sector. Shetty emphasized the importance of regulatory clarity and a robust domestic Web3 ecosystem, stating:

Whether it’s Trump or Biden, the global impact will be felt worldwide. With India closely monitoring the situation, their response could set the stage for a new era in global crypto regulation.

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