Cryptocurrency enthusiasts have found little reason to be optimistic about Kamala Harris’ stance on digital currencies—despite some hopeful sentiments from her supporters. With recent actions from the Federal Reserve, it seems unlikely that a Harris administration would significantly shift U.S. cryptocurrency policy if she were to become president.
Federal Reserve’s Crackdown: Impact on Cryptocurrency-Friendly Banks
On September 4, the Federal Reserve issued a cease-and-desist order against United Texas Bank, citing deficiencies in its foreign correspondent banking and virtual currency customer practices. The bank was found to have inadequate risk management processes and compliance with the Bank Secrecy Act. To remedy this, the bank must implement a comprehensive risk management plan, focusing on improving its customer verification processes and ensuring compliance.
Is “Operation Choke Point 2.0” Affecting the Cryptocurrency Industry?
Dan Spuller, the head of industry affairs at the Blockchain Association, has raised concerns about the Federal Reserve’s actions, pointing to what he describes as “Choke Point 2.0” under the Biden administration. The term “Operation Choke Point” refers to a prior U.S. government effort to pressure banks into cutting ties with politically controversial—but legal—industries, such as gun retailers and cannabis dispensaries.
Now, the crackdown appears to target the cryptocurrency sector. Under the Biden administration, several actions reflect this trend:
- The White House discouraged banks from engaging with cryptocurrency.
- The Treasury Department proposed a 30% tax on crypto mining energy consumption.
- The Federal Reserve denied a crypto-friendly bank’s request for supervision.
- The Energy Information Administration attempted to gather information from crypto miners through emergency powers.
- SEC enforcement actions against cryptocurrency businesses continue to surge.
The cease-and-desist order against United Texas Bank is just the latest example of this regulatory trend.
What Would a Harris Administration Mean for Cryptocurrency?
Many Democrats hope a Harris presidency could bring a more favorable stance toward cryptocurrency. However, Harris has remained notably silent on the issue, providing little clarity on how her administration might differ from the current Biden approach.
Harris’ silence is particularly striking given the Democratic Party’s 2024 platform, which doesn’t mention cryptocurrency in its 92 pages. In contrast, the Republican Party’s 2024 platform takes a much stronger stance on cryptocurrency, committing to:
- Ending the government crackdown on the industry
- Protecting the right to mine Bitcoin
- Defending self-custody of digital assets
- Enhancing financial privacy
- Opposing the creation of a Central Bank Digital Currency (CBDC)
Will Kamala Harris Shift U.S. Crypto Policy?
As Harris continues to focus on her late-stage campaign efforts, it remains unclear whether cryptocurrency policy is a priority. With the Federal Reserve’s recent enforcement actions and the Biden administration’s ongoing scrutiny of the crypto industry, a Harris-Walz administration seems unlikely to make significant changes to U.S. cryptocurrency regulation.
While there is always a possibility of a future policy shift, the cryptocurrency industry should temper expectations. Without a clear stance from Harris, the outlook for cryptocurrency policy under a future Harris presidency remains uncertain.
