Move fast and break everything: Crypto and party competition in the United States

In November, 2022, the giant cryptocurrency exchange FTX filed for bankruptcy. The financial fallout from that event, including two bank failures, made crypto politically radioactive. Yet less than three years later, crypto, like Donald Trump himself, staged a triumphant Second Coming, as the President signed into law the so-called “GENIUS Act” – short for Guiding and Establishing National Innovation for U.S. Stablecoins. Analysts have traced the industry’s phoenix-like resurrection, showing how key crypto billionaires and companies aligned with Trump early in the 2024 campaign, transforming him from a skeptic into a political champion. But the flip side of the story is much less discussed: how support for crypto has grown among Democrats. This paper analyzes voting by House Democrats on the GENIUS and Clarity Acts, in the context of the campaign for sweeping financial deregulation mounted by both crypto and traditional finance. The implications of a growing race to the bottom in financial regulation, cybersecurity issues, and some implications for central bank stances on crypto all receive attention.