Podcast Summary: POLITICO Tech – ‘We’re just getting started’: Inside crypto’s plan to remake Washington

Episode Information:

• Title: ‘We’re just getting started’: Inside crypto’s plan to remake Washington
• Host: Stephen Overle, POLITICO
• Release Date: January 14, 2025
• Description: This episode delves into the resurgence of the cryptocurrency industry in Washington, highlighting strategic political maneuvers by industry leaders like Coinbase to influence policy and regulation in their favor. Emily Choi, President and COO of Coinbase, shares insights into the industry's political strategies, achievements in the 2024 election cycle, and future plans under the new administration.

1. Introduction to Crypto’s Political Resurgence

Stephen Overle sets the stage by contrasting the crypto industry's previous struggles with its current optimistic outlook:

• [00:03] Overle recalls the crypto scandals of a few years prior, including the FTX collapse and Sam Bankman-Fried's legal troubles.
• [02:10] Emily Choi acknowledges the industry's transformation from being a "pariah" to gaining significant political traction:

  “Who would have thought 18 months ago that today we'd have a crypto czar in the presidential administration.” [02:10]

2. Strategic Political Engagement by Coinbase

Emily Choi outlines Coinbase’s multi-faceted approach to influencing Washington:

• Lobbying and Grassroots Mobilization:

  “We had lobbying, we did grassroots. We built something with a bunch of other industry players called Stand with crypto.” [03:00]

• Political Donations through Super PACs:

  “We backed a super PAC called Fairshake to ensure that crypto has a seat at the table just like any other issue.” [03:00]

Choi emphasizes the importance of organizing the 52 million American crypto users into a recognizable voting bloc demanding clear regulations and support for innovation.

3. Achievements in the 2024 Election Cycle

Choi highlights the successful election of pro-crypto candidates:

• Winning Majority:

  “84% of the 355 Pro crypto candidates up for election won their races and over 2x as many pro crypto candidates than anti crypto candidates.” [07:35]

• Bipartisan Support:

  “That’s nearly 2/3 of the House of Reps. And then 100% of the new 12 elected senators are pro crypto.” [07:35]

This significant political shift has resulted in a 278-member bipartisan pro-crypto majority in the House, signaling strong legislative support for the industry.

4. Regulatory Priorities Under the New Administration

Choi outlines Coinbase’s key regulatory asks for the first 100 days:

• End Regulation by Enforcement:

  “We want to make sure that going forward there is no dumb turf war between the SEC and CFTC.” [04:23]

• Clear Legislative Framework:

  “We want to have clear rules of the road about operating crypto businesses in the United States.” [04:23]

• Defined Roles for Regulatory Bodies:

  “A market structure bill that explicitly talks about the CFTC overseeing digital commodities, being clear about what the SEC versus the CFTC owns.” [04:23]

Choi stresses the necessity of a well-defined regulatory environment to foster innovation and reduce legal uncertainties that have previously hindered startups.

5. Collaboration with New Administration Leaders

Discussion revolves around the incoming administration’s crypto-friendly appointments:

• David Sacks as AI and Crypto Czar:

  “He understands crypto and AI and their transformative potential beyond speculation.” [06:40]

• Paul Atkins as SEC Chair:

  “These are very pragmatic, sensible leaders who understand how to think about these spaces.” [06:40]

While Coinbase has engaged in conversations with these leaders, Choi clarifies that shaping specific legislation remains the role of the administration and Congress.

6. Long-Term Political Strategy

Choi discusses the sustained efforts required to maintain and expand political support for crypto:

• Ongoing Investment:

  “The message that we're Sending here, to be totally clear is we're just getting started.” [11:11]

• Bipartisan Appeal:

  “Crypto is a purely nonpartisan thing. We really just want the absolute best free market pro crypto politicians, regardless of their party.” [12:03]

Coinbase aims to ensure that all members of Congress understand and support crypto, emphasizing a bipartisan approach to legislation.

7. Navigating Industry Competition and Collaboration

Choi addresses potential conflicts with traditional financial institutions:

• Unique Voter Base:

  “Crypto users are a passionate group who desperately want to make sure that the financial system works for everyone.” [13:39]

• Collaborative Outlook:

  “We are thrilled when the banks or when the tradfi people or others get into crypto.” [14:00]

Coinbase views collaboration with traditional industries as beneficial, promoting an expansive and inclusive growth model for the crypto ecosystem.

8. Addressing Potential Conflicts of Interest

The conversation touches on concerns regarding political figures' involvement in crypto ventures:

• Political Engagement as Positive:

  “If you have people in D.C. who are actually using and building products in that same space, that's great.” [15:28]

• Focus on Free Market Principles:

  “I think about free markets and I think about users adopting the best product possible.” [16:35]

Choi emphasizes the importance of politicians understanding crypto through personal use, advocating for sensible and pragmatic regulation over notions of favoritism.

9. Current State and Future Prospects of the Crypto Market

Choi provides an optimistic outlook on the crypto market’s trajectory:

• Market Resilience and Growth:

  “The rally since the election shows how much the political and regulatory headwinds were holding the market back.” [17:26]

• Focus on Long-Term Utility:

  “Crypto is also bigger than any one asset. Our whole focus as a company, as an industry right now is expanding broader utility.” [17:26]

She underscores the importance of enduring market cycles and the role of clear regulation in sustaining long-term innovation and stability.

10. The Necessity of Clear Regulation

Choi advocates for prompt and sensible legislative action to stabilize and advance the crypto market:

• Analogy to Sports:

  “Every sport has refs and a clear rulebook and crypto needs the same.” [19:07]

• Call for Pragmatic Legislation:

  “We are very, very excited and optimistic that good, sensible crypto regulation will come to play in 2025.” [19:07]

Emphasizing the need for structured oversight, Choi believes that well-crafted regulations will pave the way for innovation akin to the Internet's development.

Conclusion

Emily Choi’s conversation on POLITICO Tech highlights a pivotal shift in the crypto industry’s political influence, driven by strategic lobbying, grassroots mobilization, and significant electoral investments. With a supportive new administration and a clear regulatory framework on the horizon, Coinbase and the broader crypto community are poised for substantial growth and integration within the U.S. financial system. Choi's insights reflect an industry committed to collaboration, bipartisan support, and long-term innovation, positioning crypto as a significant force in shaping future economic and technological landscapes.

Notable Quotes:

• Emily Choi: “We have mobilized 52 million crypto users to have their voice heard in DC.” [02:10]
• Emily Choi: “84% of the 355 Pro crypto candidates up for election won their races.” [07:35]
• Emily Choi: “Crypto is a purely nonpartisan thing. We really just want the absolute best free market pro crypto politicians, regardless of their party.” [12:03]
• Emily Choi: “Every sport has refs and a clear rulebook and crypto needs the same.” [19:07]

This comprehensive summary encapsulates the key discussions and insights from the episode, providing a clear understanding of crypto's evolving role in Washington and its strategic plans to influence policy and regulation.