How will the 2024 elections affect global crypto policy?
The 2024 Indian and US elections are seen as crucial for the future of global cryptocurrency policy. With India becoming a key player in the cryptocurrency market and the United States continuing to dominate, these election results could have a significant impact on the digital asset space. Let's take a deep dive into how the political environment in these two countries could affect the trajectory of cryptocurrency.
1. US Government
1) Trump's New Attitude on Cryptocurrency
Donald Trump's stance on cryptocurrency has taken a big turn. Once a staunch critic, he is now incorporating digital assets into his campaign strategy. His team has begun accepting donations in a variety of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH) and even the funnily named Dogecoin (DOGE).
This shift is a strategic move to attract the growing crowd that is increasingly involved in cryptocurrency investment. Trump, who tweeted his skepticism about cryptocurrency in 2019, now sees the value of embracing this digital wave and acknowledging the growing political influence of cryptocurrency enthusiasts.
2) Tactical shift in the Biden administration
The Biden administration is also showing signs of a shift in cryptocurrency regulation. The Securities and Exchange Commission (SEC) recently approved a spot Ethereum exchange-traded fund (ETF), suggesting that their stance may be softening. The move appears to be a response to the growing political influence of the crypto community and a strategy to avoid alienating potential voters.
Experts like Haseeb Qureshi of Dragonfly believe that Biden's adjustment is an effort to win votes in a hotly contested election. The government seems to be balancing consumer protection and the growing demand for crypto-friendly policies.
2. India's growing cryptocurrency influence
1) India's current cryptocurrency situation
India is becoming a major player in the cryptocurrency space, with about 93.5 million cryptocurrency holders, accounting for about 6.55% of the population. Despite the rapid adoption of cryptocurrencies, the regulatory environment remains quite strict, such as the 1% source deduction tax levied on transactions.
The government of Prime Minister Narendra Modi is cautious about cryptocurrencies and is more concerned about broader economic and social issues. Compared to pressing issues such as unemployment and religious tensions, cryptocurrencies are still a secondary issue in their view.
2) Political parties' views on cryptocurrencies
In India, neither the ruling Bharatiya Janata Party (BJP) nor the Indian National Congress (INC) has made cryptocurrencies a major component of their policies. The BJP's manifesto mentions digital sovereignty and cybersecurity, but does not explicitly mention cryptocurrencies. Similarly, the Indian National Congress talks about the use of digital ledgers in agricultural transactions, but does not directly mention cryptocurrencies.
3) The future of India's cryptocurrency policy
Regardless of the election results, India's cryptocurrency policy is unlikely to change significantly in the short term. If the Modi government remains in power, the current cautious attitude is expected to continue. A victory by the opposition may bring new perspectives, but even if there is a policy shift, it is unlikely to happen immediately due to the existence of broader issues.
3. The impact of the US election results on cryptocurrency regulation
1) Possible impact of the Trump administration
The Trump administration may introduce a more friendly cryptocurrency regulatory environment to promote innovation and investment. Trump's acceptance of cryptocurrency donations and his forays into digital assets, such as his non-fungible token (NFT) project, indicate his support for the industry.
Experts such as MatterFi's Mihał Popieszalski believe that Trump's approach could appeal to young, tech-savvy voters who are active in the cryptocurrency space. The growing political influence of this group could push for more favorable regulatory policies.
2) Possible impact of the Biden administration
While showing some signs of easing, the Biden administration is likely to maintain a cautious stance, focusing on consumer protection and financial stability. Approval of a spot Ethereum exchange-traded fund (ETF) shows recognition of the legitimacy of cryptocurrencies, but strict regulation is still likely.
Popieszalski noted that the Biden administration is likely to emphasize regulatory clarity to create a more orderly and controlled cryptocurrency market. This approach could appease traditional financial markets while meeting the growing demand for digital assets.
4. Summary
The 2024 elections in India and the United States will undoubtedly play a key role in shaping global cryptocurrency policy. While the political landscape in India suggests a continuation of current restrictive policies, significant changes are likely to occur in the United States depending on the election results. Whether it’s Trump’s pro-crypto stance or Biden’s cautious approach, the future of cryptocurrency regulation will be significantly affected by these political dynamics.
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