As the US Presidential election approaches, tensions are rising on Capitol Hill. Both parties are searching for new arguments in their favor, and the crypto policy might become one of them.

Recently, Donald Trump has become the first major party candidate to start accepting crypto donations, confirming the Republicans’ naturally softer stance on the sector.

However, the Democrats also seem to understand the growing importance of the pro-crypto voters. A recent wave of positive crypto regulatory developments from the Blue Party, along with a noticeable weakening of some of the most vehemently anti-crypto Democrats could suggest a soon-bipartisan crypto support in the US.

Small pro-crypto actions have been noticed recently across both chambers of Congress, as well as within independent agencies like the SEC and FDIC. So far, nothing revolutionary, but small streams are known to make great rivers. Here’s what has happened in Washington D.C. since last week.

The Congress

Last Thursday, 32 Democrats voted with Republicans to send the new SEC accounting guidelines back to the President’s desk. These rules, identified by the independent Government Accountability Office as inappropriate, aimed at imposing severe capital requirements on crypto custodians. President Biden is yet to act on it.

On Monday, a bipartisan bill called the Deploying American Blockchains Act of 2023 was passed with a margin of 334 to 79 by House representatives. The bill would enable the Secretary of Commerce to become the principal advisor to the President regarding blockchain technology and to “take actions necessary and appropriate to promote the competitiveness of the United States” in the blockchain industry.

Today, the Senate is to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21), which some call the most significant piece of crypto legislation likely to become law. This act would delimit the jurisdiction boundaries of the SEC and the CFTC over crypto, in favor of the latter.

Federal agencies

Tomorrow, the SEC is expected to pronounce on Ethereum spot ETFs (or more precisely, on VanEck’s application to launch one). The expectations of approval were rather low considering SEC Chair Gary Gensler’s steady anti-crypto position, but the recent rumors have sparked new hope.

On Monday, Bloomberg Intelligence ETF analyst Eric Balchunas raised his odds for the approval of a spot ether ETF from 25% to 75% after hearing “chatter” that the SEC could be taking a favorable decision. Indeed, the Commission asked the exchanges to update 19b-4 filings on an accelerated basis – a step necessary for a potential spot ether ETF. According to Balchunas, such a U-turn would be due to “increasingly political issues”.

Another Federal agency which is likely to face a crypto-friendlier change is Federal Deposit Insurance Corp. (FDIC). On Monday, its Chairman Martin Gruenberg announced he would resign. The reason is not crypto-related (sexual harassment and discrimination culture within the agency), but the consequences could have an impact on the crypto sector. Under Gruenberg’s leadership, the FDIC took a hard line against crypto during last year’s baking crisis, notably accusing Signature Bank of over-reliance on crypto industry deposits. He is also accused by Castle Island Ventures co-founder Nic Carter to be one of the major architects of the so-called “Operation Choke Point 2.0” – a series of actions by the US government aimed at crippling the crypto industry by cutting its access to banking.

Furthermore, Mr Gruenberg is also known as a confidant of Senator Warren (D-MA), a notorious crypto hater. Some analyst speculate that his demise might indicate a decline in her authority within the Biden Administration.

Presidential race

Crypto is becoming a noticeable topic among American voters too. While numerous surveys put crypto ownership somewhere between 20% and 30% of the population, an interesting election-related survey was shared by Paradigm, a technology-oriented VC. Conducted among registered voters, it shows that 19% of self-identified Democrats and 18% of Republicans own crypto. Most importantly, though, a total of 25% of self-identified independent voters are also crypto holders. These are key swing voters, and they are particularly important to persuade.

Former President Trump might have intuited the political force of the crypto community and has courted its favor, officially accepting crypto donations. Whether President Biden will follow in his footsteps is anyone’s guess, but the fact that crypto is gaining politicians’ attention could be favorable for the sector.