Why Kamala Harris is quietly embracing crypto

An important new question for presidential candidates: Where do you stand on cryptocurrencies? Donald Trump has already made friendly gestures to the crypto sector. Now Kamala Harris appears to be joining in.

In an "overture to young men," Axios said, Harris has signaled her "friendliness to cryptocurrency." The signal came at a recent Wall Street fundraiser. "We will encourage innovative technologies like AI and digital assets, while protecting investors and consumers," she told attendees. Why now? Election-year outreach. Younger men are "more likely than any other voter group to own cryptocurrencies," said Axios, and they're also trending toward Donald Trump and the GOP at a rate that is "alarming" to Democrats.

"Welcome to the crypto election," Claire Williams said at American Banker. The industry has become one of the "most visible and vocal" business sectors trying to influence the 2024 presidential and congressional elections — with a campaign "war chest" that already exceeds the banking industry's contributions. That's an "enormous" amount of power for a "fledgling industry," said Williams. The aim? To see more "industry-friendly regulators and legislation come 2025."

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Looking for a 'breakout year'

Cryptocurrency was "once on the fringe of finance" but now stands ready for a "breakout year" after the November election, Laurent Belsie said at The Christian Science Monitor. But the industry has also attracted the attention of regulators — including Democrats and Republicans in Congress — who see both "potential and pitfalls" in digital currencies. Trump has indicated his own warmth to crypto, backing his sons' World Liberty Financial project and speaking at the Bitcoin conference. But some in the industry have kept an eye on Harris."You don't win statewide elections on several occasions in California without being tech-forward," said a speaker at last month's Crypto4Harris fundraiser.

The election could "define the future of crypto," said the BBC. The Biden administration has led a "sweeping crackdown" on crypto firms — prosecuting FTX founder Sam Bankman-Fried for fraud and Binance co-founder Changpeng Zhao for allowing criminals to launder money on his platform. Those prosecutions might be why the number of Americans using cryptocurrencies dropped to 7% last year. A tight presidential race, though, could give the industry some leverage with both candidates. "Every vote is going to count," said one executive, and "crypto votes are no exception."

A 'dialogue' between campaign, crypto industry

Money may be a bigger factor than votes. The industry has already spent $119 million on this year's elections, "magnitudes more" than in previous cycles, Whizy Kim said at Vox. Crypto can muster that financial power even though the product itself has "struggled to gain any real traction with the public." Digital currencies have been around since 2009, but crypto "still hasn't penetrated" as a mainstream payment method. Instead, it is mostly used as a "vehicle for speculative investment." That might be why companies "redoubled their efforts to help elect pro-crypto politicians."

Harris' fundraiser comments were "deliberately broad," Jesse Hamilton said at CoinDesk. But she is unlikely to offer a "deep dive" into potential crypto policies before the November election. Her campaign has kept "dialogue running with a narrow group of industry executives and insiders." That's "progress" one executive told Hamilton. "All we want are sensible rules," said Coinbase's Paul Grewal, "and we'll follow them."