News outlets have reported a handful of potential Democratic challengers as potential replacements. However, that all depends on if Biden is replaced.
Newsom takes a neutral stance on crypto, while Brown would be a “nightmare” for the crypto industry, one source said.
President Joe Biden’s weak performance during a highly anticipated presidential debate left some looking for who could replace him to run against former president Donald Trump — and how do they feel about crypto?
Though some wanted crypto to be a part of the debate on Thursday night, that’s not quite what happened as pundits and news outlets reported a frail performance from Biden as Trump bellowed out a slew of false claims. Now Democrats are reportedly talking about replacing Biden with a different presidential candidate, which could prove to be an enormous feat.
Biden would have to agree to withdraw and then it becomes a “kind of free for all,” said John Aughenbaugh, associate political sciences professor at Virginia Commonwealth University.
“At that point, any number of challengers could present themself as a potential nominee. And it should be noted, time is of the essence if the Party decides to go this route, as the Convention is less than two months away,” Aughenbaugh said in an email to The Block.
News outlets have reported a handful of potential Democratic challengers including Vice President Kamala Harris, California Gov. Gavin Newsom, Michigan Gov. Gretchen Whitmer, Sen. Sherrod Brown of Ohio, former First Lady Michelle Obama and Rep. Dean Phillips of Minnesota.
“Any potential candidate would have a difficult time bridging the gaps in the Democratic party while also getting people to vote for a Democratic candidate, not vote for Trump, or not voting at all,” Aughenbaugh said.
Cody Carbone, vice president of policy for the Chamber of Digital Commerce, said he doesn’t think Biden will be replaced, adding that it was too early.
“When you look at all of the candidates that are discussed for the top of the ticket in the Democratic Party, most of them don’t have an opinion on crypto, and that needs to change, like that has to change yesterday,” Carbone said in an interview.
Here’s how the potential candidates’ have viewed crypto over the years:
Gavin Newsom
“When it comes to Newsom, he has been forced to be somewhat neutral when it comes to cryptocurrency, if not somewhat pessimistic, but somewhat optimistic about Web3 generally and innovation, which I think is a great thing,” Carbone said. “I’m looking for candidates this cycle, not necessarily to have an opinion pro or against crypto, but to be pro-innovation and U.S. leadership and I think if we can get there, then they’ll end up being pro blockchain and pro crypto in the process.”
The California governor signed an executive order in May 2022 to begin implementing a crypto framework for his state, which was built on an executive order crafted by the Biden administration. Both called on regulators to work together to mitigate risks and promote innovation.
However, Newsom later vetoed a bill in 2022 that would have created a framework for companies in the digital asset space to apply for a license to operate.
“It is premature to lock a licensing structure,” Newsom wrote in a Sept. 23, 2022 letter to the California State Assembly. “A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.”
Newsom told the Los Angeles Times last year he didn’t regret that veto following the fallout of the crypto industry after major firms such as FTX collapsed. As for the executive order, Newsom said California took a “sober approach.”
“We tried to … look at this through the prism, long term, of how this fundamentally is going to change relationships, particularly in the financial sector,” he told the Los Angeles Times. “Blockchain in particular is something that I see only becoming more and more predominant in our lives.”
Newsom later signed that into law in October 2023, noting that some parts needed to be refined.
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Sherrod Brown
The Ohio lawmaker has been critical of crypto over the years. Brown, who leads the Senate Banking Committee, has said crypto platforms too often do not use the “same common sense protections,” such as know your customer rules, that keep illicit finance away from traditional sectors.
He has also criticized the industry’s fallout following the collapse of crypto exchange FTX in 2022.
“These crypto catastrophes have exposed what many of us already knew: digital assets – cryptocurrencies, stablecoins, and investment tokens – are speculative products run by reckless companies that put Americans’ hard-earned money at risk,” Brown said during a congressional hearing in February 2023. “Not surprising from an industry that was created to skirt the rules.”
However, Brown has shown a more favorable side to regulating stablecoins. He told Bloomberg in April he is open to advancing stablecoin legislation in a package with a bill to allow banks to do business with marijuana business and other measures.
Carbone said Brown would be a “nightmare for the industry.”
“I don’t think that he sees any legitimacy for this industry and that is the biggest threat is that there are still lawmakers, mostly on the Democratic side of the aisle, who want to eradicate the industry from the United States and just cede leadership of this tech, and I would say Sherrod Brown falls in that camp,” Carbone added.
Dean Phillips
Phillips, a presidential candidate before suspending his campaign in March, has not been super vocal about crypto but was present at a Stand with Crypto event in December. There he was asked by CoinDesk about what crypto businesses should do in the meantime, as the government looks to issue new legislation.
Phillips said he would consider a crypto market structure bill, called FIT21.
“I do think that the FIT 21 bill is one that should be considered,” Phillips said in December.
Phillips also said he liked the privacy elements of crypto, but said it should not come at a cost and not be used nefariously.
Carbone said it was a positive that Phillips was willing to speak at a crypto event.
Kamala Harris, Gretchen Whitmer, Michelle Obama
The three have not really taken a stance on crypto, but Carbone said that gives him hope.
“I take it as, those candidates who haven’t said anything about crypto gives me hope and optimism that they could be a blank slate on crypto, and if that’s the case, then hopefully they’re open to education,” Carbone said.