Why Democrats Should Oppose Crypto

The unfortunate rise (and subsequent collapse) of cryptocurrency has presented itself as both an evocative symbol of faux technological progress wrapped in political corruption. Digital assets were sold to public as a utopian vision wherein centralized banking is obsolete, financial inclusion is ubiquitous, and individuals reign supreme over their own monetary transactions. However the reality is far more disqueiting, they have become nothing but a new form of gambling and grift for the post-truth social media era. They are essentially going through exactly the same legitimization process that multilevel marketing scams went through in the 1970s. Although this time the Democratic party still has time to get on the right side of history.

At its core, the crypto philosophy represents a fundamental rejection of the principles underpinning little-L liberalism. Crypto is is a libertarian project fueled by the economic inequality and precarity of thirty years of neoliberal policy and synthesized with the financialization of populist rage. The movement portends to champions individual freedom and decentralization, but in reality, it undermines the very institutions and social contracts that safeguard personal liberties in liberal democracies. By promoting a system that prioritizes unregulated financial transactions and pseudonymous interactions, crypto enthusiasts inadvertently create an environment ripe for exploitation and instability. This approach is both precarious, as it lacks the safeguards and accountability mechanisms present in traditional financial systems, and perilously deceptive when marketed as a path to financial liberation. In reality, it often serves to concentrate wealth and power in the hands of a new technocratic elite, while leaving the majority of participants vulnerable to market volatility and sophisticated financial manipulation. The promise of crypto as a great equalizer thus reveals itself as a mirage, masking a potentially more insidious form of economic disparity and social fragmentation.

The primary allure of cryptocurrency resides in its purported democratizing potential. By circumventing traditional banking infrastructure, cryptocurrencies ostensibly democratize access to financial resources and facilitate economic participation on a previously unattainable scale. This narrative of financial emancipation contains logical contradictions because crypto assets are a zero-sum speculative trade, not a new form of money or store of value. There is simply no fundamental economic value to crypto assets can be used outside of what is effectively a new form of unregulated gambling.

From the perspective of Democratic values—which ought to emphasize social responsibility, economic equity, and institutional integrity—the unfettered laissez-faire ethos of the crypto movement is an anathema. Cryptocurrency’s illiberality is most conspicuous in its facilitation of an unregulated market where nefarious actors thrive. This anarchic milieu fosters a breeding ground for illicit activities such as money laundering, tax evasion, and financing of criminal enterprises. Crypto directly undermines our sanctions regime, and is at odds with the foreign policy and geopolitical interests of the United States by providing a haven for illicit financial transactions for our adversaries. Crypto is the tool of the autocrat, the strongman, the kleptocrat, and the criminal.

The adoption and promotion of cryptocurrency entail an inherent endorsement of fiscal policies that exacerbate economic instability. Cryptocurrencies, by their very design, are prone to extreme volatility. Such volatility is antithetical to the ethos of economic stability that Democrats champion. The capricious nature of crypto markets can foment widespread financial precariousness, particularly for economically vulnerable populations enticed by the prospect of substantial returns. Thus, the promise of financial liberation morphs insidiously into a specter of economic marginalization, indulged in the guise of populist engagement.

The crypto movement fosters anarchic tendencies but also due to its role in the financialization of populist rage. The rise of cryptocurrency is intrinsically tied to an emergent form of libertarian populism that corrosively undermines democratic institutions. The crypto market, operating outside conventional regulatory mechanisms, champions an ideology of radical individualism that erodes collective social norms and responsibilities.

This financialization of populist sentiment is particularly perilous in its potential to sow discord and engender societal fragmentation. Crypto enthusiasts frequently frame their mission in adversarial terms against 'the establishment'—vilifying centralized banking systems and, by extension, the democratic governance structures that oversee them. Through this adversarial framing, cryptocurrency advocates engender a toxic narrative of distrust and disillusionment with governmental institutions. The resultant sentiment of populist rage is not channeled into constructive reform, but instead into a fractious libertarianism that eschews cooperation for confrontation, engendering civil fragmentation over communal progress.

Even more disconcertingly, the demographic most susceptible to such populist narratives comprises those already disenfranchised by prevailing economic systems—individuals experiencing economic precarity and social alienation. Crypto-evangelists prey upon these vulnerabilities, presenting participation in the crypto market as a panacea for disenfranchisement. However, as scholarly inquiry into the dynamics of populist movements elucidates, the purported liberation through crypto involvement is a mirage. In reality, these individuals often become ensnared in the volatile throes of speculative markets, exacerbating their existing vulnerabilities.

Put simply, crypto is a way to exploit the precariat, it is a wealth transfer from the poor to the rich, from those who fail to distinguish between gambling and investment, and from those are economically illiterate to those who operate digital casinos for their own gain. Public policy on crypto should be rooted in a recognition of its fundamental incompatibility with capital markets and the principles of social justice, economic stability, and democratic governance. The environmental ramifications of crypto mining, the perpetuation of wealth inequality, and the undermining of governmental oversight collectively delineate a trajectory towards socio-economic anarchy—a future starkly opposed to democratic ideals. It, alongside the rise of authoritarian demagogues like Putin, Orban, and Trump, must be opposed at all costs.

Silicon Valley libertarians either wittingly or unwittingly advance the interests of our adversaries by promoting crypto. They are the useful idiots of autocratic strongmen like Putin who wish to sow discord and dissent in our democratic institutions. They must be opposed, their agenda must be stopped, and their influence must be curtailed. We must use the levers of the state to regulate crypto out of existence and to choke it off inflows of new victims and new capital.

The Democratic party must fundamentally oppose crypto because it direct assault on the very foundation of our republic, the dollar, the rules based international order, and liberal democracy itself.