In the midst of an election year in the United States, politicians are once again resorting to using current issues to divert attention from unfavorable media coverage. One such issue being employed by some lawmakers is cryptocurrency, which they are using as a means to manipulate information that could potentially harm them when voters head to the polls in November.
For Republicans, this tactic involves making popular statements against the issuance of a central bank digital currency (CBDC) or equating cryptocurrencies like Bitcoin (BTC) with financial freedom. On the other hand, Democrats may choose to associate crypto transactions with terrorism financing or break ranks with their party members by showing support for digital assets.
One example of a Republican lawmaker using cryptocurrency as a diversion is Florida Representative Matt Gaetz. Gaetz is currently under investigation by the U.S. House of Representatives Committee on Ethics for obstruction related to allegations of sexual misconduct and illicit drug use. While Gaetz has previously supported legislation favoring crypto regulation, he has rarely emphasized the importance of digital assets in his role as a lawmaker.
However, on June 25, Gaetz introduced a bill that could potentially require the Internal Revenue Service (IRS) to accept Bitcoin payments for U.S. citizens filing their federal income taxes. Gaetz claims that the legislation was inspired by his visit to the inauguration of El Salvador President Nayib Bukele and his desire to modernize the tax system in the United States. Gaetz is currently running for reelection in 2024 and will face fellow Republican Aaron Dimmock in an August primary, followed by a potential general election against Democratic candidate Gay Valimont. At the time of publication, neither Dimmock nor Valimont had taken a strong pro- or anti-crypto stance.
Former President Donald Trump also utilized cryptocurrency as a distraction during his 2024 reelection campaign. In 2022, Trump began backtracking on his previous statements about cryptocurrencies and blockchain while in office. He officially announced his reelection campaign and, shortly after, launched a non-fungible token (NFT) collection. As Trump faced high-profile criminal and civil lawsuits, including orders to pay hundreds of millions of dollars in defamation and fraud judgments, he announced that his campaign would accept crypto contributions. Trump was ultimately convicted on 34 felony counts, marking the first time in U.S. history that a current or former president has faced such a conviction. Despite the potential for prison time, Trump continued to embrace cryptocurrency, announcing plans for all BTC to be mined in the United States if reelected and criticizing President Joe Biden’s record on crypto.
President Biden himself may not be exempt from this strategy of using cryptocurrency to shape the news. While it is unclear whether Biden’s reelection campaign will accept crypto donations at the time of publication, he has reportedly engaged in discussions with congressional leaders about digital assets and may be considering a shift in strategy based on Trump’s recent statements. If Biden were to publicly endorse digital assets, it would signify a significant policy change, as he has previously vetoed a resolution that sought to overturn a U.S. Securities and Exchange Commission (SEC) rule on crypto in banking and has criticized the energy consumption associated with digital assets. However, much of the criticism against the administration has been directed at SEC Chair Gary Gensler and Democratic Senator Elizabeth Warren, both of whom have expressed negative views on cryptocurrencies and introduced legislation linking them to illicit finance.
In conclusion, cryptocurrency is becoming an increasingly prevalent tool for politicians to divert attention away from their own controversies and shape the narrative during election years. Whether it is Republicans opposing CBDCs or Democrats associating crypto with terrorism financing, the use of cryptocurrency as a diversionary tactic is likely to continue in future elections.