How Crypto Played the Political Game—and Won 'Bigly' - Ep. 734
Nov 12, 2024
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Faryar Shirzad and Kara Calvert from Coinbase dive into how the 2024 elections are reshaping the crypto landscape in Washington. They share insights on the Fairshake Super PAC's bold strategies, which led to a more crypto-friendly Congress. The discussion highlights the need for bipartisan support and regulatory clarity in the crypto space. They also explore the challenges of maintaining a non-partisan stance and the implications of global blockchain adoption on U.S. leadership in Web3 innovation.
The strategic support of the Fairshake Super PAC significantly reshaped the political landscape, creating the most pro-crypto Congress in history.
Grassroots activism demonstrated the substantial political influence of the crypto community, rallying nearly 2 million Americans to advocate for pro-crypto candidates.
Bipartisan cooperation is crucial for crafting effective regulatory frameworks that support innovation while addressing security and consumer protection in the crypto sector.
Deep dives
The Political Shift in Crypto Engagement
The involvement of the crypto community in recent elections highlights a major political shift, particularly through the establishment of the Fairshake PAC, which successfully supported a majority of pro-crypto candidates. The strategy of leveraging grassroots activism within the vast Coinbase customer base proved effective, showing that when motivated, a large community can significantly impact the political landscape. Nearly 2 million Americans rallied under the Stand with Crypto organization, drastically increasing engagement levels from just 25,000 sign-ups in the previous year. This demonstrated the power of collective action and voting block potential within the growing crypto community.
The Function of PACs and Super PACs
The podcast discusses the distinctions between PACs and super PACs while explaining their relevance to the crypto political landscape. Fairshake, the super PAC, amassed around $170 million to fund pro-crypto candidates without direct coordination, which is a critical requirement for their operations. Meanwhile, the Stand With Crypto organization serves to mobilize voters and advocate for crypto-friendly policies, focusing on grassroots efforts rather than individual candidates. The overall approach was characterized by bipartisanship, prioritizing candidates based solely on their pro-crypto stance, not their party affiliation.
Candidates and Campaign Strategies
The candidates supported by Fairshake were chosen based on diligent research into their public positions on crypto rather than pre-existing relationships. Key significant races, including those involving candidates like Adam Schiff, demonstrated the super PAC's strategic impact in raising awareness around crypto issues, with Fairshake engaging in approximately 56 races throughout the election season. With a significant success record of 50 wins out of 54 supported candidates, Fairshake proved that targeted, well-funded political campaigns could significantly influence the outcome. This experience reflects a growing recognition of crypto's importance in political discussions and their long-term implications.
Impact of Regulatory Frameworks
The podcast emphasizes the importance of creating an effective regulatory framework for crypto, particularly highlighting the urgency of addressing banking access for crypto companies amid a climate of debanking. Key figures call for bipartisan cooperation to craft meaningful policy that goes beyond party lines, aiming to ensure fair opportunities for crypto innovators in the U.S. The discussion points to the historical context of increasing regulatory pressures causing these companies to look towards more favorable jurisdictions. As such, there is a collective emphasis on the need for effective legislation that supports innovation and maintains national security concerns.
Future Prospects for Crypto in U.S. Politics
Looking forward, the dialogue considers how new leadership in Congress might shape the future of crypto policies, especially after observing the electoral outcomes. With indications that significant strides in stablecoin regulation and market structure legislation are on the horizon, industry leaders express optimism about a more favorable political climate. The potential for a bipartisan approach could foster discussions that promote innovation while addressing issues such as security and consumer protection. This evolving landscape suggests that the crypto community may continue to solidify its presence and influence within U.S. political arenas, fostering a broader acceptance of digital assets.
The 2024 elections have reshaped the future of crypto in Washington. With almost $200 million in donations, the Fairshake Super PAC not only backed pro-crypto candidates but also took bold risks by challenging entrenched incumbents. This strategic gamble appears to have paid off, leading to the most crypto-friendly Congress in U.S. history.
In this episode, Coinbase’s Faryar Shirzad and Kara Calvert reveal the behind-the-scenes decisions that drove this unprecedented effort, discuss why crypto needs to transcend partisanship, and explain how this election could usher in long-awaited regulatory clarity. They also delve into the global stakes of blockchain adoption and whether the U.S. can reclaim its leadership as other nations surge ahead in Web3 innovation.
Show highlights:
01:48 The journey of how crypto became so important in this election
04:16 The differences between Fairshake and Stand With Crypto
08:48 How Fairshake decided which candidates to support
12:48 How Washington reacted to the massive influx of money to support pro-crypto candidates
15:51 Why Fairshake stayed out of the Presidential race
18:23 How hard it was for Fairshake to handle its non-partisan stance with both parties
22:32 How the U.S.’s approach to crypto can be compared to how it lost on the cutting-edge technologies of 5G and semiconductors
26:41 What drove the decision to attempt to unseat Sherrod Brown, which ended up giving Sen. Warren more power on the Senate Banking Committee
32:54 Whether Sen. Warren’s anti-crypto stance has been diminished after the elections
35:28 How the industry got past the fiasco of Sam Bankman-Fried and FTX
42:07 Why Faryar believes that “anyone would be an upgrade” from Gary Gensler as Chair of the SEC
46:45 How blockchain technology allows for instant settlements, a feature so needed in capital markets
49:36 What could happen with the SEC’s legal actions against crypto companies now that Gensler will lose his position as SEC chair
53:22 What Faryar and Kara expect the new administration to do around crypto
56:47 How DeFi can be regulated in the U.S. and whether Trump will support the motto “code is free speech”
1:01:37 The perception of Washington insiders about Polymarket
1:04:28 Whether the technology sector will be on the Republican side from now on
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