Ethan Lou: El Salvador’s official adoption of bitcoin as legal tender highlights crypto’s entrance into partisan political arena
El Salvador’s official adoption of bitcoin as legal tender on Tuesday was historic. The merits of it may be debated, but that move, fraught with opposition and spearheaded by a divisive president, is the biggest-yet representation of an important phenomenon: cryptocurrency’s entrance into the partisan political arena.
This advertisement has not loaded yet, but your article continues below.
It has been building for a while, even here in Canada. In 2018, I posed a cryptocurrency question to Rachel Notley, then Alberta’s New Democrat premier. There was a noticeable pause before Notley said, “I think we’ll have to get someone to follow up with you on that.”Just a year later in 2019, however, Jason Kenney, then the provincial Conservative leader, gave a surprisingly on-point take on the subject, noting how Alberta’s energy resources could complement bitcoin mining.
That year had made a difference in the way that politicians viewed crypto and their comfort level in discussing it. The context of Kenney’s remarks was important, too: he made them in the lead up to the 2019 Alberta election.
We are now two years further down the road, in the middle of a bigger, federal election. While I have not seen crypto brought up so far, this is now a vastly bigger and more assertive industry. Future elections will not be as crypto-free as this one.
This advertisement has not loaded yet, but your article continues below.
Setting the stage nicely is the U.S. Senate crypto fracas last month that stalled the White House’s US$3.5 trillion infrastructure bill. The Washington Post said the episode “reflects the extent to which cryptocurrencies — which have emerged as a trillion-dollar industry from obscurity less than a decade ago — have begun to upend politics.”
Cryptocurrencies — which have emerged as a trillion-dollar industry from obscurity less than a decade ago — have begun to upend politics
The crypto-focused HODLpac — a so-called political action committee (PAC), which raises money for ballot-box matters — has seen its Twitter following double and many new inquiries about donations. There is even talk of PACs that are decentralized autonomous organizations (DAOs), leaderless blockchain-based entities that distribute funds based on predefined rules.
This advertisement has not loaded yet, but your article continues below.
Here in Canada, the scene is tamer, like with all things. In the lobbyist registry, all the various crypto names are still represented largely by one firm. But accounting for its smaller population, this country is where crypto has a proportionally bigger presence.
A Torontonian and a Vancouverite, respectively, founded arguably the two biggest cornerstones of the current cryptocurrency space: the computing platform Ethereum and the coin-trading hub Binance, both worth billions. Canada was also home to the world’s first bitcoin ATM and has the highest number of such installations after the United States. A Bank of Canada survey shows even among the unlikely 45-to-54 age group, Bitcoin ownership almost quadrupled in 2017, and it has no doubt soared since then.
This advertisement has not loaded yet, but your article continues below.
Canada is not short on people who may have strong feelings about how cryptocurrency has increasingly butted against regulatory issues. In Alberta, for example, a bitcoin miner has been ordered shut by the province’s utility commission after local residents complained about the noise level. In Ontario, a hawkish securities regulator has caused the popular Binance to stop serving the province.
Already, an Edmonton municipal candidate is running to make hers a “cryptocurrency-friendly city.” In Texas in August, 200 bitcoiners and oil executives mingled and drank beer. They have common cause in how gaseous by-products of oil drilling can be used to mine Bitcoin. A big topic of discussion: political activism.
This advertisement has not loaded yet, but your article continues below.
Some may already see a bit of a partisan divide forming around the issue. Within bitcoin, after all, beats a mistrust of traditional institutions that has become increasingly associated with the right. Bitcoin’s prominent supporters in the United States include Peter Thiel and Steve Bannon, who helped with the rise of President Donald Trump. El Salvador’s man behind its Bitcoin adoption, President Nayib Bukele, leans right.
Cryptocurrency’s haters include people on the other side of the spectrum, such as U.S. Sen. Elizabeth Warren. Here in Canada, they include the big-L Liberal Mark Carney — a former central banker whose potential entrance into politics has been so widely discussed that such talk has become a running joke among observers.
This advertisement has not loaded yet, but your article continues below.
Yet cryptocurrency itself is also a diverse field. One survey, for example, shows that the biggest group among the crypto community leans small-L “liberal.” It is unclear how exactly that survey defines that term, which is another point to consider — that ideology is fluid and relative, and concepts of left and right have become increasingly arbitrary. Andrew Yang, contender for the 2020 U.S. Democratic presidential nomination, is a well-known crypto fan. In Canada, it is, in fact, the federal NDP that tabled resolution at its convention to study cryptocurrency as early as 2016.
This advertisement has not loaded yet, but your article continues below.
Despite the tints of partisanship in the subject, cryptocurrency users are not quite yet a discrete bloc. It’s just that, evidently, this is an issue that is entering the political arena one way or the other. There will come a day when, unlike in this election, cryptocurrency forms a part of every party’s platform.
Ethan Lou is a journalist and author of Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West, to be released this fall.
_____________________________________________________________
If you liked this story, sign up for more in the FP Finance newsletter.
_____________________________________________________________
This advertisement has not loaded yet, but your article continues below.
