With the US Midterm Elections 2022 just around the corner (Nov. 8), BeInCrypto examines what a Republican or Democrat win would mean for the crypto market.
During this midterm year, all 435 seats in the House of Representatives will be contested. In the Senate, only 35 out of the total 100 seats available will be put to the polls.
At present, the House of Representatives holds a narrow 8-seat majority in favor of the Democrats, while the Senate is effectively split along party lines with the Democrats only narrowly in control. The Democrats must therefore fight to retain both, while the Republicans will believe that control of both houses is there for the taking.
Republicans or Democrats: who’s winning?
In the lead-up to the current election, pollsters have been trying to predict whether the Democrats or Republicans will come out top in this race.
While the Democrats were believed to have the edge early on, the Republicans are looking increasingly strong as the election heats up. Key issues of concern to US voters include inflation which remains stubbornly high at 8.2%. The Democrats have tried to make political capital out of reproductive rights this election, but the issue hasn’t gained much traction with voters as economic pressures have worsened.
Part of the problem for Democrats is that the President is not especially popular. Joe Biden’s current rating is only at 40%, which is a problem for the wider party as it seeks to hold on to power.
According to pollsters it now seems more than likely that Biden will lose the House of Representatives. Democrats are expected to fare better in the Senate and may retain control of the upper house.
If the Democrats lose control of one or both houses, it would make the remainder of Biden’s term increasingly more difficult, slowing the pace of legislation or stalling it altogether.
Democrats on crypto
As with many things in politics, the Democrats’ stance on crypto is complex. Within the Democrat, camp are crypto-positive representatives such as Ritchie Torres and Jim Himes, as well as highly crypto-critical Senators such as Elizabeth Warren and Sherrod Brown.
Senior party member and former Presidential candidate Elizabeth Warren have been a particularly vociferous opponent of cryptocurrency. In May Warren questioned Fidelity’s decision to allow pension holders to allocate part of their pension provision in cryptocurrency. At that time Warren said, “Bitcoin’s volatility is compounded by its susceptibility to the whims of just a handful of influencers.”
Warren represents a hardcore streak of crypto skepticism within the Democrat party, but more widely, a more nuanced and complex view is taking shape.
In March President Biden issued an executive order on cryptocurrency which was generally viewed as positive at the time. In September that framework was brought further forward, with a focus on consumer protection. The framework did also raise concerns that it might jeopardize further blockchain innovation in the banking sector.
The Republicans on crypto
The Republicans are seen as generally more pro-crypto than their Democrat rivals.
That doesn’t mean a Republican win would lead to more crypto-positive legislation anytime soon. The more likely result would be legislative gridlock for the remainder of Biden’s term.
In recent years the red state of Texas has become a major hub of crypto activity and mining, and Republicans have pushed back on SEC overreach in cryptocurrency.
In April Patrick McHenry and Bill Huizenga expressed concern at any attempt by the Securities and Exchange Commission (SEC) to extend their reach further into crypto markets.
In an open letter to SEC chief Gary Gensler, the pair said, “We are particularly concerned the proposed rules can be interpreted to expand the SEC’s jurisdiction beyond its existing statutory authority to regulate market participants in the digital asset ecosystem, including in decentralized finance (DeFi).”
Some cross-party consensus does exist
While political parties tend to make political capital out of their differences, some unity on the subject has been found. Earlier this year a cross-party bill from Senators Cynthia Lummis (R-Wyo) and Kirsten Gillibrand (D-N.Y.) attempted to balance the needs of both consumer protection and financial innovation.
Crypto proponents will hope that no matter who wins the midterms that such sensible and measured proposals can find a path to passing.
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