Harris scrambles Trump’s crypto play

Jul 26, 2024

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QUICK FIX

Former President Donald Trump is seeking to cement himself as crypto’s candidate with a big speech this weekend at a bitcoin conference. But his pitch could be complicated by a new X factor: the ascension of Vice President Kamala Harris.

Trump’s Saturday appearance at the Bitcoin 2024 conference in Nashville is the latest sign that a second Trump term would likely usher in policies friendly to digital asset firms. It comes as major crypto companies and their investors are poised to spend tens of millions of dollars to influence this year’s elections.

Industry players expect Trump’s speech to focus on boosting bitcoin mining in the U.S., protecting the self-custody of digital assets and preventing the Federal Reserve from creating its own digital currency — all in line with the GOP platform released earlier this month. Some crypto enthusiasts are hoping Trump will go even further by endorsing a plan for the government to establish a strategic reserve of bitcoin.

“It gives the Trump embrace of crypto increasing bona fides,” said J. Christopher Giancarlo, who earned the name “CryptoDad” when he served as the chair of the CFTC under Trump.

But a potential new challenge looms from the rise of Harris. Trump has framed his crypto pitch as an attack on President Joe Biden, whose regulators have cracked down on the industry. Now with the campaign undergoing a big reset, crypto-friendly Democrats are hopeful that Harris will usher in a softer approach. Though she hasn’t taken a position on digital asset regulation as VP, crypto advocates point to her age and roots in tech-friendly California as reason to be optimistic.

“I'm hopeful,” Rep. Josh Gottheimer, a pro-crypto New Jersey Democrat, told our Eleanor Mueller. “I think she understands the space, being from California.”

Ron Conway, a venture capitalist and top Democratic donor whose firm has invested in crypto companies, posted on X this week that he has “known Kamala for decades, and she’s been a fighter, a leader, and an advocate for the tech ecosystem since the day we met.”

To be sure, Harris is broadly expected to run on the Biden administration’s record, and speculation about her position on crypto could be projection. But before Biden dropped out, his camp appeared to be taking a more open-minded approach to crypto concerns, with senior adviser Anita Dunn meeting with industry leaders in Washington.

On Capitol Hill, Democrats remain divided over the issue. On Wednesday, the party’s top crypto skeptic, Sen. Elizabeth Warren (D-Mass.), criticized a bill that Senate Majority Leader Chuck Schumer signaled he wants to advance.

In anticipation of a possible shift, crypto critics are already pushing Harris to hold the line on the issue.

Rep. Brad Sherman, a fellow California Democrat and leading crypto skeptic on the House Financial Services Committee, said he has “already urged Kamala to stick with the positions of the Biden-Harris administration on crypto.”

He says Harris should use the issue to attack Trump, a former crypto skeptic who once called bitcoin a “scam.”

“I don’t think the people of the country want a slot machine president — you put in the money, you pull the handle, you get what you want,” he said, referring to the crypto industry’s campaign spending. “And that’s clearly what Trump is.”

Trump’s crypto embrace didn’t come out of nowhere. Pro-crypto policies have become a big push for the GOP since he left office in 2021. But he has cashed in extensively on his newfound support for digital assets. Crypto billionaires who have backed Trump — including the Winklevoss twins and the venture capitalists Marc Andreessen and Ben Horowitz — have cited the issue in explaining their support for him. And his campaign has collected millions of dollars in crypto donations since it began accepting digital assets in May.

Before his speech in Nashville on Saturday, Trump will host a fundraiser where the asking price is $844,600 to attend a VIP reception, roundtable and get a photo with the former president, according to an online invitation. (A lower-tier ticket that goes for $60,000 per person or $100,000 per couple allows attendees to just attend the reception and get a photo with Trump.)

When he takes the stage afterward, expect him to try to turn crypto into a weapon against his new opponent.

“Crypto innovators and others in the technology sector are under attack from Kamala Harris and the Democrats,” Trump campaign senior adviser Brian Hughes told MM in a statement. “While the Biden-Harris Administration stifles innovation with more regulation and higher taxes, President Trump is ready to encourage American leadership in this and other emerging technologies.”

IT’S FRIDAY — What are you watching for in Trump’s crypto speech this weekend? Let me know at jgoodman@politico.com and find me on X @Jasper_Goodman. As always, Sam Sutton can be found at ssutton@politico.com.

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Driving the day

PCE index for June released at 8:30 a.m.

‘The fundamentals are on the side of Harris’ — Vice President Kamala Harris is moving into the lead role of selling the U.S. economy to voters just as the pitch is getting easier to make, our Victoria Guida reports.

The government said Thursday that GDP increased at an annualized pace of 2.8 percent from April through June, far better than expected, even as a key measure of inflation has dropped below 3 percent.

That means the economy has stayed resilient without further stoking price spikes, leaving open a path for the Federal Reserve to begin cutting rates in September — a process that could lead to lower borrowing costs on everything from cars to homes.

But as Victoria points out in her latest column, Harris’s support for paid family and medical leave could also become a key part of her economic message. Victoria writes that so-called care policies have “the potential to set Harris apart from President Joe Biden in an important way. Biden focused his campaign efforts on convincing people that the economy is doing well, pointing to low unemployment and rising wages. But he spent little time at all talking about what else needs to be done over the next four years, even as he acknowledged that an affordability crisis is still weighing on people.”

Schumer v. Warren, crypto edition — Senate Majority Leader Chuck Schumer told our Eleanor Mueller that he wants to pass cryptocurrency legislation this year.

"We'd like to get something done," the New York Democrat said. "We'd like to have appropriate guardrails."

Asked which legislation he has in mind, he cited a proposal led by Senate Agriculture Chair Debbie Stabenow. Her bill, which may get a committee vote next week, would give the CFTC new authority to police digital assets.

"Stabenow and [ranking member John] Boozman are working on a bill," Schumer said. "I'd like to see what they produce."

That view puts him at odds with the top crypto critic in his caucus, Sen. Elizabeth Warren (D-Mass.), who criticized the Stabenow bill on Thursday.

"Advancing a crypto bill that doesn't deal directly with the problems of money laundering ... makes no sense at all," Warren told Eleanor.

Her comments signal that Democrats will face more internal rifts over crypto legislation in the coming months. It's unclear how Senate Banking Democrats, who include Warren, would want to proceed on crypto regulatory concerns under their jurisdiction.

Marshall backs off crypto AML — Sen. Roger Marshall's office on Thursday confirmed that the Kansas Republican withdrew this week as a cosponsor of Warren's bill that would target money laundering using digital assets, Eleanor reports.

Pro Briefing: Kamala Harris and the World. What we expect on foreign policy and trade. Join POLITICO Pro for a deep-dive conversation with our specialist reporters about the vice president’s approach to foreign policy. Register Now.

Regulatory Corner

Brown concerned over CapOne-Discover — Senate Banking Chair Sherrod Brown is raising concerns about Capital One’s bid to buy Discover, but stopping short of asking regulators to block the deal, Michael Stratford reports.

The Ohio Democrat said in a letter to the Fed and the Office of the Comptroller of the Currency that they should carefully consider how the proposed merger would affect workers, consumers and the stability of the financial system.

Regulators seek input on banks’ fintech relationships — Top banking regulators announced Thursday that they’re soliciting public and industry input on banks’ partnerships with financial technology firms, Michael reports.

The request for information from the Federal Reserve, Federal Deposit Insurance Corp., and Office of the Comptroller of the Currency comes as regulators have increasingly scrutinized lenders’ arrangements with fintech firms in recent years.

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On the Hill

Warren shrugs off execs’ Harris hype — Sen. Elizabeth Warren isn't buying corporate America's speculation that a Harris administration could be more amenable to their demands, Eleanor reports.

The New York Times reported Thursday that venture capitalists are circulating letters backing the California Democrat days after billionaire Mark Cuban, among others, said Harris could be "far more open to business [and] crypto" than Biden. Warren says that's baseless.

"These guys can puff themselves up and explain that they know how the world works — because after all, they're really rich, so they must know everything," Warren said in an interview. "It doesn't work that way, and most Americans know it."

She added that "it's a serious problem in D.C., and one that requires far stronger ethics rules to push back against."

Warren had a similar response earlier Thursday when asked about billionaire pressure on Harris to fire FTC Chair Lina Khan.

"Billionaires in either party shouldn't be calling the shots," Warren told reporters. She added that she trusts Harris to continue Biden's anti-trust policies.

FDIC pick faces more struggles with Republicans — Sen. John Kennedy said Thursday that he is "90 percent sure" he will oppose FDIC nominee Christy Goldsmith Romero, Eleanor reports.

"I'm trying to keep an open mind, but I just didn't think she was as strong in the committee," the Louisiana Republican told reporters. He added that her answers to members' questions for the record were "weak."

"I haven't been terribly impressed so far," Kennedy said.

Sen. Mike Rounds said earlier this week he will not back Goldsmith Romero for the top job. Aides say Brown is eying Wednesday for a committee vote, which would likely require GOP support since Sen. Bob Menendez's seat is expected to be empty.

House Democrats probe Bank of America on guns — Rep. Sean Casten (D-Ill.) led 50 House Democrats Thursday in asking Bank of America for more information on its May decision to lift a ban on lending to manufacturers of assault weapons for civilians, Eleanor reports.

“The strong positions by Bank of America in 2018 likely saved lives,” the lawmakers wrote in a letter. “Your retreat in recent years strikes us as situational ethics."

Bank of America did not respond to a request for comment.

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Crypto

Chris Lehane joins Coinbase board — Our Christopher Cadelago scoops that Chris Lehane, a leading Democratic strategist who worked for Bill Clinton and Al Gore before becoming one of the political world’s most influential players in tech, is joining the board of directors at Coinbase. The move is designed to bolster the bipartisan credentials of the largest U.S.-based cryptocurrency exchange as Republicans increasingly embrace the industry and its policy goals.

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