Jane Hume, Australia’s minister for financial services, argued in a speech last month that the rapidly growing crypto industry had the potential to create hundreds of thousands of new jobs and boost Australia’s economic growth by more than 50 per cent.
But if the country voted for the opposition Labor party at the May 21 national election, she said, none of this would happen. Australia would lose out because the opposition would ban digital assets “out of timidity [and] an obsession with removing all risks and protecting consumers from themselves”.
The contrast, she said, could not be more stark with the current government, which wanted Australians to take part in the digital gold rush.
“There is a political reality here. I would love support of the crypto industry to be a bipartisan issue, but it simply isn’t,” she told her audience.
This is the sound of politicians waking up to the voter potential of crypto enthusiasts. Bitcoin and its peers have surged in popularity since the start of the pandemic and millions of people around the world now own digital assets, which are worth more than $2tn in total.
As their popularity increased, so did attention from elected officers: crypto is becoming a minor hot button issue as political parties across the world wonder whether a stance on digital assets and their regulation could win votes.
“It wouldn’t surprise me if crypto becomes an issue at the next election,” said Sheila Warren, chief executive of Crypto Council for Innovation, a US lobby group.
“I think right now at a local level it’s more likely [to be a topic]. By the next election . . . crypto has contributions to make on climate, on social justice and it’s up to us as an industry to lay out these arguments,” she added.
The digital asset industry is already flexing its lobbying muscles in Washington and Westminster, and cross-party supporters of the technology, known as the “crypto caucus” are set to become among the leading power players on Capitol Hill.
The original ideology of crypto cuts across party lines and places emphasis on libertarian ideas as well as social goals such as financial inclusion. But regulation and the extent to which these tokens should be overseen by authorities is emerging as a dividing line between parties. The politically conservative parties tend to take a more liberal approach while liberals argue for stricter regulation.
In the US, at least two states have candidates running on a pro-blockchain platform in this year’s Senate votes, including former child actor Brock Pierce in Vermont.
“Everyone should support innovation and better technology. Unfortunately, it has become a partisan issue for some, as we’ve seen from recent efforts to increase regulation,” said Bruce Fenton, a well-known figure in the crypto industry who is running for the Republican nomination in New Hampshire.
And crypto is seeping into politics all around the world. In early April, the UK’s Conservative government announced a range of measures designed to turn the country into a global hub for digital asset businesses, issuing its strongest endorsement of the sector to date. On the same day, UK chancellor Rishi Sunak tasked the Royal Mint with issuing a non-fungible token.
The appeal of crypto as a potential vote-winner is easy to understand when looking at the numbers, especially since digital assets are primarily held by younger people. Globally, more than 80mn individual crypto wallets are at present active, according to data website Blockchain.com.
A survey from crypto exchange Gemini found that 18 per cent of UK adults own digital assets, while in the US a comparable number of adults hold such coins. They are mostly young, with more than 40 per cent of crypto owners in the US aged under 35.
The numbers are rising. Almost half of all crypto owners in the US, Latin America and Asia-Pacific bought digital tokens over the course of last year, the Gemini study shows.
“The recent Russian invasion of Ukraine and the sanctions by the US government have brought digital assets to the attention of many voters,” said Richard Levin, chair of the FinTech and Regulation Practice at law firm Nelson Mullins Riley & Scarborough.
He added that the presidential executive order on digital assets had also brought the issue of cryptocurrencies to the attention of candidates running for Congress. There were already some, such as Wyoming’s Cynthia Lummis, who are outspoken supporters of blockchain and whose campaigns would probably benefit from the support of crypto enthusiasts.
With the number of crypto-curios rising, interest from politicians is only going to follow.
“I can say this with certainty: more and more candidates whether incumbent or challengers are paying attention to crypto,” said Warren.