The year 2024 is shaping up to be a game-changer in many aspects. Amidst the buzz surrounding advancements in AI and 5G technologies, one crucial aspect of 2024 that has been overlooked is the record number of elections taking place worldwide in recent memory. Over 64 countries, including 7 of the top 10 most populous countries, encompassing half the world’s population, are heading to the polls to choose their leaders.
From economic giants like the USA, India, UK to powerhouses like the BRICS bloc, the electoral fervor is noticeable. Other major players in this electoral frenzy include the likes of Russia, Brazil, and South Africa and spread across the globe encompassing regions like the Indian Subcontinent and Southeast Asia, with countries such as Bhutan, Sri Lanka, Bangladesh, Singapore, Taiwan, Indonesia, and Vietnam heading to the polls. In addition, the European Union Parliamentary elections are also scheduled for 2024.
With this electoral landscape covering a significant 50% of the world’s population, 2024 emerges as a pivotal year for democracy and governance on a global scale. But what does this mean for the world of cryptocurrency, which is built on the principles of decentralization? Why should a crypto investor in India, for instance, be concerned about the outcome of the US elections?
The answer lies in the interconnected nature of governance and regulation, particularly in the realm of finance and commerce. While cryptocurrency champions decentralization, governments worldwide often look to each other for cues when formulating regulations and laws that have cross-border implications. As such, the outcomes of elections in key countries can significantly influence the regulatory landscape for digital assets such as cryptocurrencies. Decisions made by newly elected officials could shape the trajectory of crypto adoption, investment, and innovation on a global scale.
Therefore crypto enthusiasts cannot afford to ignore the impact of political events on the regulatory environment. In an increasingly interconnected world, the fate of cryptocurrency is intricately linked to the decisions made by governments across the globe.
Factors in play for the Cryptoverse
Political stances: Candidates and parties have varying views on crypto, ranging from strong support to skepticism or even outright hostility. On a positive note, election outcomes might bring officials with crypto-friendly or -averse viewpoints into power, influencing the regulatory landscape.
Public opinion: Elections reflect public sentiment, including towards cryptocurrencies. A strong showing for pro-crypto parties and candidates could indicate wider public acceptance, potentially influencing regulations towards a more accommodating stance.
Global regulatory coordination: Cryptocurrency is a global phenomenon, and major regulatory changes in one country can ripple through others. Elections impacting major economies, like the US or China, could create momentum for coordinated international regulations.
Let us see how elections in the major economies and power blocs will impact the future of cryptoverse.
United States
Upcoming election: Presidential election in 2024.
Frontrunners: Democratic nominee President Biden seeks re-election. Ex-President Donald Trump is the presumptive nominee of the Republican Party.
Outlook: Both parties have varying views within. A Democratic win might lean towards consumer protection and regulatory clarity, while a Republican win could focus on financial innovation with less stringent regulations.
Current:
The SEC and CFTC are taking active roles in regulating different aspects of crypto. An Executive Order encourages responsible innovation.
Expected:
Democratic Win: More focus on consumer protection, investor education, and regulatory clarity. Potential for licensing and registration requirements for platforms.
Republican Win: Emphasis on financial innovation and less stringent regulations. Possible focus on self-regulation and industry-led solutions.
India:
Upcoming election: General elections in 2024
Frontrunners: Bharatiya Janata Party (BJP) currently holds power, and analysts generally see them as favorites. Other major contenders include the Indian National Congress (INC) and regional parties.
Outlook: BJP has shown cautious openness to crypto, while INC hasn’t taken a firm stance. A BJP win could see continued gradual regulation, favoring innovation with some controls. The outcome of an INC win is still uncertain. It will depend on their final stance.
Current:
The Reserve Bank of India (RBI) has a cautious stance, banning banks from dealing with crypto and proposing a 30% tax on gains. Parliament is considering a Crypto Bill potentially banning private cryptocurrencies. India has recently launched its own Central Bank Crypto Currency (CBDC). The Finance Ministry has brought homegrown crypto trading platforms under the ambit of a Financial Intelligence Unit (FIU) and banned foreign players in the space.
Expected:
BJP Win: Gradual regulations focusing on KYC/AML, promoting innovation with some controls. Potential for extension of Central Bank Digital Currency (CBDC).
INC Win: Uncertainty; unclear stance on regulations, could influence future discussions.
Russia:
Election: Presidential Election concluded in March 2024.
Frontrunners: Current President Putin sought re-election and won.
Outlook: Russia has shown mixed signals, but currently leans towards stricter controls. Putin’s win will likely continue this trend, with limited openness to crypto. Likely the continuation of stricter controls like banning crypto exchanges and mining, promoting their own CBDC instead.
Indonesia:
Election: Presidential election concluded in February 2024.
Frontrunners: Crypto-friendly former Defense Minister Prabowo Subianto won the elections.
Outlook: The elected incumbents are seen as largely pro-crypto and pro-digital assets. A slew of regulations are expected to be brought in to help the government benefit from Crypto transactions while not stifling innovation and markets.
UK:
Upcoming election: The next general election is not officially scheduled, but analysts generally predict it could happen in late 2024.
Frontrunners: The Conservative Party currently holds power, but the Labour Party is gaining ground.
Outlook: Conservatives have cautiously explored regulations while Labour leans towards stricter controls. A Conservative win could maintain gradual regulations, while a Labour win might bring stricter oversight.
Current: The Financial Conduct Authority (FCA) has begun registering crypto businesses and developing regulatory frameworks.
Expected:
Conservative Win: Continued cautious approach, focusing on anti-money laundering (AML) and combating financial crime.
Labour Win: Stricter controls like bans on certain types of crypto, potentially mirroring China’s approach.
EU:
Upcoming election: European Parliament elections in 2024.
Frontrunners: No single party or group dominates, with various political alliances vying for influence.
Outlook: The EU is already developing a comprehensive regulatory framework. Election outcomes might influence specific details but likely won’t change the overall direction toward regulated adoption.
Current: The comprehensive regulatory framework, MiCA bill, is under development, and expected to be finalized in 2024.
Expected:
Election outcome unlikely to majorly impact direction: Focus on regulated adoption with emphasis on consumer protection, financial stability, and AML/CFT. Specific details and implementation timelines might be influenced by elected officials. The overall outlook is very positive.
The election outcomes will significantly shape the future of cryptocurrency:
Regulation: Stringent regulations could stifle innovation, while clear and supportive frameworks could boost adoption.
Global Standards: The EU’s and United States’ approach could influence global regulatory standards, impacting markets worldwide.
Institutional Investment: Clear regulations could attract more institutional investors, legitimizing the crypto market in the respective countries.
What the future holds:
The 2024 elections hold immense potential to reshape the global cryptocurrency landscape. From potential surges in regulations to the rise of CBDCs, the choices voters make will have a lasting impact, especially since crypto owners are gradually becoming a strong voting block.
With the expected Bitcoin halving in 2024 coming near, the market is bullish and optimistic in the cryptoverse. The impact and intensity of this bull run may be dependent on the regulations coming into play from powerful players and how they seek to control cryptocurrencies and other digital assets.
