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2024: The year of elections could also be the year of crypto

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Monday, May 27, 2024 04:05 PM | Invezz via QuoteMedia

2024: The year of elections could also be the year of crypto

2024-05-27 16:05:59 ET

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2024 is shaping up to be a landmark year for cryptocurrencies as political and regulatory landscapes shift in major economies.

The U.S. has already seen significant developments, such as the SEC’s approval of a spot Ether ETF, signaling a potential softening of regulatory stances towards digital assets.

This comes at a time when both former President Donald Trump and current President Joe Biden are making strategic moves to court the crypto community, setting the stage for a pivotal election that could dramatically influence the future of cryptocurrency regulation.

As the world watches, other major economies, including India and the U.K., are also grappling with their own regulatory frameworks and political dynamics, making 2024 a crucial year for the global crypto market.

U.S. elections could reshape crypto regulations

The political landscape in the United States is undergoing significant changes with potential implications for the cryptocurrency market.

Both former President Donald Trump and current President Joe Biden have adjusted their positions on cryptocurrencies, which could dramatically impact the market’s future.

Trump’s campaign has recently started accepting donations in various cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and US Dollar Coin (USDC), as well as smaller coins like Shiba Inu (SHIB) and Dogecoin (DOGE).

This move appears to target young male voters who are increasingly investing in digital assets. Trump has previously shown support for cryptocurrencies, raising millions through his Trump Digital Trading Cards NFT projects.

In contrast, the Biden administration is signaling a potential shift in its approach to crypto regulation. The recent approval of a spot Ether ETF by the Securities and Exchange Commission (SEC) indicates a more favorable stance towards digital assets.

This change could align the administration closer with the crypto community ahead of the November election. However, Biden’s focus remains on consumer protection and financial stability, likely leading to stringent regulations.

“The SEC’s approval of a spot Ether ETF suggests a strategic pivot,” says Tim Delhaes, CEO of Grindery.

“This could mean a softer regulatory environment for crypto under Biden’s administration.”

Crypto’s minor role in India’s 2024 elections

In India, where the population exceeds 1.4 billion, the significance of cryptocurrencies in the upcoming elections is minimal.

The country, which has 93.5 million crypto owners (6.55% of the population), has seen significant regulatory measures under Prime Minister Narendra Modi’s administration.

These include a 30% tax on profits from digital asset sales, no offsetting of losses, and a 1% tax deducted at source for each transaction.

Despite these measures, crypto remains a niche issue among Indian voters.

More pressing economic and social concerns overshadow the debate on digital assets. The BJP’s manifesto, for instance, focuses on educating senior citizens about digital scams and addressing digital sovereignty threats.

The Indian National Congress (INC) emphasizes digital ledgers for agricultural transactions and tackling cybersecurity issues within the financial infrastructure.

Balaji Srihari, Business Head, CoinSwitch, told Invezz,

We believe that the government’s approach to crypto taxation is part of a broader effort to protect investors and ensure the stability of the financial system. Given the history of the crypto ecosystem, such cautious policy measures are understandable.

U.K. election delays crypto legislation

The United Kingdom’s crypto landscape has also been affected by political developments. Prime Minister Rishi Sunak’s call for a general election on July 4 has delayed new crypto legislation, pushing back long-sought regulations by at least six months.

This delay occurs as other regions, including the European Union, Dubai, and Hong Kong, accelerate their crypto regulatory frameworks.

Ian Taylor, board adviser to trade body CryptoUK, expressed concerns about the delay.

It’s net negative, really, because we are laggards. We’re behind the rest of Europe firstly, and then other jurisdictions in Asia and the Middle East.

Despite these short-term delays, the long-term growth of the U.K.’s crypto industry, supported by a global financial center and ample investment capital, remains promising.

Both major political parties have committed to making the U.K. a hub for digital financial services.

Global implications of crypto regulations

The upcoming elections in these major economies will significantly influence the future of cryptocurrency regulations globally.

In the U.S., the outcome of the presidential election could determine the pace and nature of crypto regulation, impacting international standards.

If Biden wins, expect a continuation of current regulatory approaches. If Trump wins, the focus might shift, affecting the pace of international crypto regulation.

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2024: The year of elections could also be the year of crypto

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