It’s a safe bet that 80-year-old President Biden—like his 76-year-old predecessor—has never bought Bitcoin, used a stablecoin, or tried out Web3. But that didn’t stop Biden’s underlings at the White House from issuing a blog post on Friday, decrying crypto as predatory and dangerous. The document reads like a diatribe and even has a whiff of moral panic—as if Biden had instructed the makers of Reefer Madness to turn their attention to digital currency.
Meanwhile, the post coincided with a questionable decision by the Federal Reserve to deny a key account to a Wyoming stablecoin bank and came two days after Biden’s powerful ally, Sen. Elizabeth Warren (D-Mass.), praised Securities and Exchange Commission Chairman Gary Gensler for cleaning up a crypto mess allegedly created by former President Trump. The fact that all of these events transpired in the same week suggests a coordinated effort by the White House.
Republicans in the House of Representatives, meanwhile, have reacted to the Biden administration’s increasingly anti-crypto stance with salvos of their own, accusing Democrats of blocking innovation and trying to distract from the fact that Gensler and many of their ranks appeared to have been chummy with Ponzi-schemer Sam Bankman-Fried.
All of this points to how crypto has become yet another flash point in America’s interminable culture wars alongside immigration, education, and the environment. All of these are important policy issues that are crying out for bipartisan solutions—but where both Democrats and Republicans are more interested in whipping up their supporters to fight along tribal lines.
Many Americans who have not used crypto may regard it as inconsequential compared with other policy issues and, in the case of Democrats, be fine if their party sets about to destroy it. But this would be a mistake. As I’ve written before, crypto is most fundamentally a technology and, like the internet, the question for U.S. lawmakers is not whether it should exist—but rather how to regulate it in a way that reduces fraud and scams, but also lets the country reap the benefits of a powerful new financial system.
Democrats should be particularly wary of how they proceed in the crypto debate. While the party’s leaders who are in their seventies and eighties want to squelch the technology, the same is not true of younger members—including rising star Rep. Ritchie Torres (D-N.Y.), who thinks crypto can be a valuable financial inclusion tool for his constituents in the Bronx. Meanwhile, younger Americans of all stripes are less likely to share the White House’s view that its culture-war posturing on crypto is in the best interest of consumers. Instead, they are likely to conclude that the White House is simply out of touch.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
Bitcoin climbed close to $25K over the weekend before making a slight retreat. (Cointelegraph)
Black Web3 founders raised $60M in funding in 2022, up from the $16M they raised the year before. (TechCrunch)
Sam Bankman-Fried has been contacting FTX employees over Signal, leading prosecutors to ask a judge to modify his bail conditions to stop this. (Fortune)
Bankman-Fried’s law professor mom and his sometime girlfriend, Caroline Ellison, have not been cooperating with prosecutors’ investigation into FTX. (Business Insider)
Crypto ETFs have supplied “eye-popping returns” since the start of the year. (FT)
MEME O’ THE MOMENT
Crypto Twitter taking White House news in stride:
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