How Kamala Harris Could Usher in a Clean Slate for Crypto Regulation

What a difference a week makes. On Thursday, July 18, Donald Trump formally accepted the GOP nomination for the 2024 presidential election at the Republican National Convention, just days after surviving an assassination attempt. On Sunday, July 21, at 1:46 p.m. ET, everything changed when President Biden announced his decision not to seek re-election. The political landscape became as volatile as a bitcoin price chart.

With Biden’s support, Vice President Kamala Harris has quickly become the presumptive Democratic nominee, raising small donations at a pace reminiscent of Barack Obama’s rebellious 2008 presidential campaign. But the enthusiasm is coming at the door of a well-funded crypto industry that has taken an aggressive stance to protect itself from a hostile regulatory environment and is pushing to unite around a single issue to cast its votes for the GOP candidate.

As soon as the Biden news broke, I started seeing social media posts from the crypto community wondering what the Harris administration’s stance on crypto would be. Would it continue its policy position of regulation and adversarial policy via enforcement, or would it take the opportunity to redesign crypto policy to embrace the new economy? Or would it go in a new direction?

Then I saw a flurry of ideas on social media that Vice President Harris was considering attending the Bitcoin 2024 Conference in Nashville, Tennessee, from July 25-27. Trump, Michael Saylor, and Elon Musk are also expected to be there, making it a major high-stakes event.

On Thursday, July 24, conference organizer and Bitcoin Magazine CEO David Bailey shared on X that Vice President Harris had declined to attend. Given that it takes more than 48 hours to schedule an appointment for a senior Federal official, it seemed unlikely she would attend. The process involves coordination, review and approval by multiple offices, and any necessary approvals.

Even that assessment, however, is a win. With the crypto industry’s voice on the Harris campaign’s radar, Harris now has the opportunity to speak to a deeply concerned and invested group of Bitcoiners and begin the repair work of bridging the gap to the anti-crypto aggression and attempts to enforce it through regulation by the current administration.

Biden Administration’s Anti-Crypto Policy

Under the Biden administration, crypto regulation has been marked by a confusing and enforcement-heavy approach, largely under the influence of Senator Elizabeth Warren (D-MA). Known for her skepticism of the crypto industry, Warren has advocated for strict regulatory measures to protect consumers and maintain financial stability. Her influence is evident in the administration’s “Chokepoint 2.0” strategy and the cautious stance of its ally, SEC Chairman Gary Gensler, as well as the cautious regulators who have restricted the crypto industry’s access to traditional banking services, effectively “debanking” the sector.

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Fueled by misinformation and a grain of truth, Warren’s approach has focused on addressing risks associated with cryptocurrencies, such as fraud, money laundering, and terrorist financing, but has failed to properly scale the discussion to balance risks with significant economic justice opportunities and separate fact from fiction.

Technological Moderate

Vice President Harris’ previous approach to tech regulation has been characterized by a more moderate tone than the current administration’s approach. She has built strong relationships with major tech companies like Facebook and Google throughout her career. She has maintained a prominent presence at their headquarters and has enlisted staff and allies from those companies to advise her campaign on tech policy. Her approach emphasizes finding a balance between regulation and enabling technological progress. A strategic policy shift that includes past openness to innovation, combined with her campaign’s focus on middle-class economic empowerment, could create an opportunity for a both/and approach that optimizes investor and consumer protections with the robust development of the Web3 economy on blockchain rails and underpinned by cryptographically secured digital assets.

So what are the signs that she’s open to a shift in crypto policy? First, billionaire Mark Cuban noted on X this week that Harris’ team has been asking a lot of crypto-related questions. That, combined with her pro-innovation record and entertaining discussions about Bitcoin appearing in 2024, bodes well for a different approach in the Harris Administration.

Ten Policy Changes for a New Era

As the Democratic presidential candidate, Harris has a unique opportunity to chart a new course for crypto policy, what I call the “New Economy 2025,” that balances sensible and transparent regulation with robust innovation for investors, consumers, and businesses. This approach will promote financial inclusion and protect consumer interests while ensuring the U.S. continues to be a leader in the digital asset economy.

To that end, here are ten policy changes that could redefine the Democratic Party’s stance on digital assets under a Harris presidency and lead to a more inclusive financial ecosystem:

Change Securities Laws for Clarity and Innovation

What: Review existing securities laws to clarify the distinction between a security and a commodity in the context of cryptocurrencies. I advocated strongly for this in my testimony before the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion.

How: Ensure that relevant and specific institutions are designated to regulate the crypto industry, preventing overly broad or contradictory interpretations that could hinder market growth and stifle innovation.

Update Banking Regulations for Crypto Integration

What: Amend the Bank Secrecy Act and other banking regulations to create clear rules for banks doing business with cryptocurrency businesses.

How: Promote a crypto-friendly banking environment, enable financial institutions to safely engage with the crypto sector, reduce perceived and real risks, and encourage greater integration and accessibility. Additionally, consider the legal and regulatory changes required to include bitcoin reserves as part of the Reserve Bank’s reserve portfolio.

Reform Tax Policies to Support the Digital Economy

What: Reforming tax policies to address the unique aspects of digital assets, providing clear guidelines on taxing crypto transactions and assets.

How: Ensuring equitable participation across all income levels by creating a framework that allows individuals and businesses to meet their tax obligations while participating in the digital economy safely and legally.

Improve Consumer Protection Laws

What: Strengthening consumer protection laws specific to the crypto market, ensuring transparent disclosures and protection against fraud.

How: Implement measures that will provide clear recourse for victims, build consumer trust, and ensure a safer cryptocurrency market by protecting particularly vulnerable populations.

Develop Strong Privacy Laws to Protect Individual Data

What: Formulating strong privacy laws to protect individual data in blockchain and digital identity systems.

How: Promote privacy-friendly digital identities and protect marginalized communities from exploitation by ensuring crypto transactions respect individual privacy rights.

Integrate Cryptocurrency and Blockchain Education

What: Incorporating cryptocurrency and blockchain education into national education standards, including financial literacy programs.

How: Provide opportunities for all demographics by providing individuals with the knowledge they need to navigate the digital economy with confidence and responsibility through school curricula and adult education programs.

Allocate Federal Funds for Blockchain R&D

What: Allocating funds to support research and development in blockchain technology.

How: Spur innovation, create jobs and maintain the U.S. competitiveness in the global digital economy by investing in R&D, particularly benefiting underserved communities through job creation and economic inclusion.

Introduce DeFi Platforms for Financial Inclusion

What: To encourage the development and adoption of decentralized finance (DeFi) platforms to provide financial services without traditional intermediaries.

How: Increase access to financial services for underserved communities, promote financial inclusion and close the wealth gap.

Create Public-Private Partnerships for the Public Good

What: Building partnerships between government agencies and private blockchain companies for public infrastructure projects.

How: Leverage blockchain technology to develop digital identity systems and transparent supply chains, improving public services and economic opportunities for all. Also consider regulatory testbeds to further encourage and support innovation by collaborating with government stakeholders so they can lead effectively.

Harmonize International Crypto Regulations

What: Establishing the US as a global leader in crypto regulation by collaborating with international organizations.

How: Develop harmonized regulations to ensure the U.S. plays a central role in shaping the future of the global digital economy, promoting stability and supporting cross-border innovation.

By implementing these initiatives, the Harris administration can create a regulatory environment that not only protects investors and encourages innovation, but also promotes economic justice and opportunity for all, ensuring the United States remains at the forefront of the digital asset economy.

The “New Economy 2025” vision will highlight the transformative potential of blockchain and cryptocurrencies, leverage technology to create a more equitable and inclusive financial system, increase investment opportunities, create jobs and drive economic growth, protect consumers, investors and industry from fraud and scams, simplify taxation, ensure financial inclusion and economic justice, and ensure industry stability and trust.

Crypto is political; it’s not partisan. Or at least it shouldn’t be. Harris’ track record of championing technological progress and protecting privacy rights puts her in a unique position to capitalize on the transformative potential of blockchain and cryptocurrency.

As we move forward, advocating for regulatory clarity, consumer protections, financial literacy, and global cooperation is essential to solidifying the United States as a leader in the digital asset economy. By embracing this reimagined approach, we can truly democratize access to financial opportunity, empower marginalized communities, and champion the values ​​of freedom and privacy, paving the way for a prosperous and inclusive New Economy 2025.

Note: The opinions expressed in this column are those of the author and do not reflect the opinions of CoinDesk, Inc. or its owners and affiliates.