How crypto became a bellwether for the US culture wars
The crypto narrative has been captured by the darker forces within US culture and politics.
A US congressman named Warren Davidson has introduced a bill to reform the Securities and Exchange Commission (SEC), that all-powerful US government institution that regulates and governs the business of conceiving, structuring, distributing and selling an investment instrument that it defines as a “security”. The commission is currently headed by a very controversial and divisive fellow named Gary Gensler, who was Barack Obama’s CFO and was appointed to this role by President Joe Biden. The same fellow who has had his boot on the neck of crypto since his appointment, choking off its air supply.
Representative Davidson, a Republican, now has a bill in front of Congress called the SEC Stabilization Act, which is an angry riposte to the perceived unbridled power and wrongheadedness of the SEC. It is touted as a reform package, a set of brakes to be applied to government overreach. He said in a recent tweet, “U.S. capital markets must be protected from a tyrannical Chairman, including the current one. It’s time for real reform and to fire @GaryGensler as Chair of the SEC.”
Oh, and he also wears a button around town that says: “Fire Gary Gensler”.
And therein lies a fascinating techno-political story.
The original pioneers of what is now broadly referred to as crypto started as a band of deep math nerds in the 1970s who gradually chipped away at some nagging problems that had long flummoxed researchers interested in the science of secrets. This curious and raggedy band of intellects were not known for their political party allegiances, although many were vaguely libertarian, wanting the freedom to pursue their interests without the grubby intrusion of the real world.
Among them were all stripes, but they were mainly left-leaning (as best I can tell) and sometimes suspicious of government and its occasionally ill-informed delegates. As often, they were simply disinterested in politics. However, one must assume that the more political of them were indeed drawn to the prospect of building a monetary system beyond the control of governments, as early communications among the group suggest this. They were political, in a sense, but not as in Democrat versus Republican. They tended to float above that, their heads deep into the cryptographic mysteries of secret-keeping, digital security and monetary modelling.
Not any more. The crypto narrative has been captured by the darker forces within culture and politics.
Since Bitcoin poked its baby head out of the womb in 2010, the entire subject of digital currencies has very quickly been absorbed in the US culture wars. The GOP casts attempts to regulate crypto as an example of radical nanny-statism and radical leftism, while the Dems have characterised some of the very public crypto frauds as a reason regulation is needed to hobble the baser instincts of a free market.
It is nonsense, of course — these are just facile slogans. I have been in the space for a very long time, I spend half the day reading about the personalities, currents and eddies surrounding cryptocurrency, NFTs, DeFi, Web3, GameFi and the metaverse. Their zealots, adherents and participants range widely across the political spectrum and there are good guys and bad guys in this space, just like anywhere else.
The arguments between the two cultural poles are bitter and irrational. Gensler himself said on CNBC: “We don’t need more digital currency. We already have digital currency. It is called the dollar.” But his opinion on this matter is irrelevant — it is not his job to weigh in on whether we need another digital currency or not, and this quote makes his bias clear. In the Democratic narrative, the crypto world is a cesspool of criminals. And the other side implies that all crypto-sceptics are communists.
Take Elizabeth Warren, for example, the Democratic senator from Massachusetts. She has built an entire campaign on her opposition to crypto (see picture). On the other side, Republican presidential candidates Florida Governor Ron DeSantis, Miami Mayor Francis Suarez and entrepreneur Vivek Ramaswamy are all saying nice positive things about Bitcoin. Praise-singing crypto is what they do on the stump, their claims to “freedom” (a well-known rightwing trope) tightly tethered to the freedom of a citizen to value, buy and sell anything that they wish to, without government surveillance. And, amusingly, there is some internecine sniping, with Ramaswamy claiming he knows much more about crypto than DeSantis.
What is this all about? About 50 million Americans have previously traded or now own some sort of cryptocurrency. You do not want to piss off a constituency that large. The Republican leadership is certainly aware of this fact. The whole “freedom” rap seems a little disingenuous and it is not lost on me that the GOP was viciously anti-crypto not that long ago. Even Donald Trump said, with reliable ignorance, in 2021: “Bitcoin, it seems like a scam.” No, it is these 50 million voters they are after.
And the anti-crypto Dems? Well, they get shrieky about consumer protection and the rape of the hard-working middle class by techno-elitists. This is also disingenuous — most crypto investors are just normal folk, and fraudulent activity is a tiny, tiny percentage of the crime that happens in the real world of finance, much smaller still as a percentage of illicit activity in general. What they are really scared of is that money will escape the control of the state, and that this will defang the big snake of financial regulation. Which is true, of course, to some extent.
So I’ll nail my colours the mast. I am a slightly left-of-centre crypto enthusiast, and I think Gary Gensler should indeed be fired. But I still won’t be voting for the GOP.
Steven Boykey Sidley is a professor of practice at JBS, University of Johannesburg. His new book, It’s Mine: How the crypto industry is re-inventing ownership, will be published in August.