Top Republicans are falling in love with bitcoin. Sometimes, to hear them tell it, literally: “I have truly fallen in love with Crypto / DeFi,” Eric Trump wrote on X Tuesday teasing a “big announcement” (echoed this morning by his older brother). Trump paterfamilias appeared at the Bitcoin 2024 conference in July, promising that if re-elected “from now on the rules will be written by people who love your industry, not hate your industry.” Sen. Cynthia Lummis (R-Wyo.) went so far as to translate her passion for crypto into legislation that would establish a “strategic bitcoin reserve” of government-owned crypto that would lead to the U.S. acquiring 5 percent of the world’s (finite) bitcoin supply. Having barely existed a decade ago, crypto has leapt into the heart of American politics. Support for crypto is enshrined in the GOP’s official 2024 platform, while Democrats have been divided over its merits. Still, the technology’s rapid rise could also create an unexpected, awkward tension between the currency’s libertarian origins and the party that has most enthusiastically embraced it. Bitcoin’s most ardent supporters call it “freedom money,” the implication being that government-issued money, subject to banking regulations and the policy directives of the Federal Reserve, is decidedly unfree. Former Trump White House strategist Steve Bannon (now serving a federal prison sentence tied to defying a subpoena in the congressional investigation into the Jan. 6, 2021 attack) once described it as a key tool in his ongoing war against American institutions: “It’s disruptive populism,” he told The New York Times in 2018. “It takes control back from central authorities. It’s revolutionary.” Now sitting Republican senators like Lummis are echoing the “freedom money” rhetoric, making for an awkward marriage with the crypto community that is often explicitly anti-government. Nick Szabo, a pro-bitcoin computer scientist and cryptographer whom many have speculated is the currency’s mysterious, pseudonymous creator, wrote on his blog in 2018 to protest the Federal Reserve’s assertion that “traditionally, currency is produced by a nation's government.” Szabo goes on to recount centuries of history of non-governmental currencies, with the implicit critique that privately-created currency spends as well, and has just as much credibility, as that minted by a government. One figure who embodies the tension between the libertarian ethos at the heart of bitcoin and mainstream politics is former Rep. Ron Paul (R-Texas), whose presidential campaign Szabo endorsed in 2008. Paul’s libertarian platform demanded an end to the Federal Reserve System and a return to the gold standard, as POLITICO’s Ben Schreckinger wrote in 2022. Crypto did not play a key role in Paul’s campaigns, but veterans and top supporters have gone on to take up prominent roles in the crypto movement. The man himself, at 88, has not quite jumped in the pool, telling Ben that while “crypto becomes more plausible because of what our government has done to the money… I don’t think the final verdict is in about cryptocurrencies.” Institutional crypto is also ambivalent about getting entangled with the government as a “strategic bitcoin reserve.” A spokesperson for the Blockchain Association told DFD that the group is “still digesting the details — and seeking our members' input.” And traditional business leaders are predictably wary: The Wall Street Journal’s editorial board cautioned in July against Trump’s plan, which it saw as requiring all future bitcoin to be made in America, and support for Lummis’ stockpile idea. “If crypto currencies really are a libertarian vehicle to invest free from political vagaries, then they should trade on their own without government help,” the board wrote. “Mr. Trump’s sketchy plan reflects the contradictions of much of his MAGA platform, which advocates deregulation but at the same time more government industrial policy.” Lummis shot back in a letter to the editor published by the WSJ today, trying to square the contradictions by saying that “over the long term a bitcoin reserve like this will serve as an important and stable store of value” and a tool for paying down debt. That kind of Wyoming practicality is a far cry from what bitcoin’s biggest cheerleaders like the investor Balaji Srinivasan promised last year: that the U.S. dollar would soon be “worth toilet paper” and that advocating for crypto means “getting innocents to Bitcoin lifeboats.” That hasn't happened. But bitcoin’s true believers, who spent years trying to tear down the existing currency system from the outside, might find in a future Trump administration that they hold key seats at the table.
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