The crypto industry is better positioned than ever in Washington
After a hard year for crypto, the theme for 2024 is resilience — and the combo of future court cases, pro-crypto sentiment and legislation are all in our favor
Midjourney modified by Blockworks
As we look ahead to 2024 and the future of crypto public policy in the United States, resiliency is the most important lens to view potential success and failure.
The outlook for crypto — not just in the US, but globally — was grim at this juncture last year. The rapid implosion of FTX, and the intense scrutiny from regulators and lawmakers that followed, led some to conclude that the crypto industry’s days were numbered.
Fast forward a year, with SBF’s conviction now behind us and a rebounding crypto market, those predictions look not only shortsighted, but naive. We still believe not only in the resilience of the underlying blockchain technology within this industry, but also in the people who build, advocate and fight for its future.
Those people have been proven right in their belief — and it’s because of them that I’m hopeful about the state of pro-crypto public policy in the coming year.
Three areas, in particular, stand out as focal points for the year ahead. First is the string of consequential court battles that will likely reach their conclusions in 2024.
Ripple was vindicated this past summer, complicating the SEC’s anti-crypto crusade. Likewise, Grayscale’s battle with the Commission over whether they can convert their Bitcoin Trust into an ETF will reach its conclusion next year, potentially setting off a string of new consumer-facing options for buying and selling cryptocurrencies.
Beyond those cases, the crypto industry’s rights under the Constitution will be a theme in 2024. It’s vital that writing code is seen as speech and thus protected by the First Amendment. Self-custody of assets, supported by DeFi protocols, must be understood as protected under the Fourth Amendment’s privacy considerations. And, behind it all, crypto must have the same due process protections guaranteed under the Fifth Amendment as any other US person or industry is afforded.
Read more from our opinion section: Washington shouldn’t give in to crypto panic
Courts move slowly, but I believe we will see the outcomes of these cases, and more, swing decisively in crypto’s favor next year.
Simultaneously, public sentiment regarding cryptocurrencies has proven very durable, and the whole industry is becoming more mainstream as the potential benefits offered by blockchain technology and digital assets are more widely known.
As individuals, investors and a growing number of traditional financial institutions embrace cryptocurrencies, there’s a groundswell of support building for a more responsive and accommodating regulatory framework. Indeed, look at the public’s response to the IRS’s recent comment period on its proposed update of what kinds of entities constitute a “broker.” Some 125,000 comment letters were submitted, a remarkable number that demonstrates how getting these policies right matters to a large — and growing — number of people.
Presidential candidates and future-looking Congressional members respect this sentiment, and crypto’s importance in US politics will grow in 2024 and beyond. It’s possible voters will support more pro-crypto candidates, and with both Houses of Congress and the White House up for grabs in next year’s elections, we may be left with a much more pro-crypto legislative environment in a year’s time. The groundwork for successful legislation was laid with the bipartisan bills that were passed out of committee this past summer. The House and Senate can bring these bills for a full vote this session or have to answer their pro-crypto constituents in the fall.
And while pro-crypto public sentiment is evolving into a nascent political force, the crypto industry has developed a mature advocacy machine that can turn that sentiment into political reality.
Crypto’s core issues present complex questions for lawmakers and regulators (just look at the long-running broker rulemaking as one example), and the industry needs steady, well-informed and well-funded advocates of all kinds in Washington DC to make our case clearly and consistently.
And, in some cases, the industry needs to fight back — such as pushing back on misguided legislation and correcting the narrative around crypto and illicit finance. Crypto is a young industry and we have to compete with entrenched incumbents who would prefer to stifle innovation and competition. We’ve built that capacity over the past five years, and now have the reach needed to effect real change.
The resiliency born from hardship over the past year will serve the industry well as we enter 2024. As the saying goes, “What doesn’t kill you makes you stronger.” We have bipartisan support for legislation in Congress, and November elections may bolster the pro-crypto caucus amongst our elected representatives. Traditional finance is beating down the door to invest in crypto. And the public is on our side. These factors support what we believe will be a successful year for crypto public policy in 2024.
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