from Trump to Milei, passing through El Salvador

What is the relationship between cryptocurrencies and politics? Who are the politicians who seem to be closest to the world of virtual currencies? Between leaps forward by some, ambiguity by many and the risk of underestimating an innovative financial movement, we try to dispel the fog on a very little debated aspect when discussing “bitcoins and the others”.

Political interest in cryptocurrencies is growing

2024 will be remembered as the year cryptocurrencies entered the political speech globally. The definitive push in this sense can certainly be attributed to the new president-elect of the United States, who went from defining bitcoin as “a disaster” to even creating his own exchange platform for cryptocurrencies, the World Liberty Financial.

During the electoral campaign, the Republican candidate, who won the elections on 5 November 2024, implemented his U-turn on the world of virtual currencies, identifying cryptocurrency holders not only as a potential electoral basinbut also a powerful one ally of the campaign from a communication and financial point of view.

Two other political leaders know something about it: Javier Milei, president of Argentina, and Nayib Bukele, president of El Salvador

Let’s start with the populist leader Nayib Bukele, who in 2021 saw his project to make bitcoin the legal tenderthus replacing the US dollar which for 20 years had been the only real currency in El Salvador. Initiative that attracted a lot of attention in the crypto world, generating effects such as a sort of “monetary tourism” on the part of cryptocurrency investors and observers of the phenomenon, with even the project of creating the first Bitcoin citya city centered on the best-known of virtual currencies.

And then there is mercythe president with the chainsaw, who is effectively cutting the presence of the State in Argentina and thus obtaining excellent results from a financial point of view but at the same time a worrying growth in poverty and inequalitywhich especially affect women and all minorities present in the country.

But what does Milei have to do with cryptocurrencies? The Argentine president is considered the first libertarian leader to be elected and, as we will see, the crypto maximalists can be recognized in the libertarian principles, and in particular of bitcoin, which in fact was created to disintermediate finance and eliminate the power of central banks and states on monetary policies.

Politics, crypto maximalists and libertarians

Let’s take a step back to understand better. Who are I libertarians? Let’s start from the definition offered by Wikipedia:

«Libertarianism (from the French: libertaire, “libertarian”; from the Latin: libertas, “freedom”) is a set of political orientations in which freedom is seen as the highest political goal. Libertarians’ positions vary depending on their considerations of property rights and the nature of people and, on considerations of the legitimate functions and power of the state or private entities, often calling for the limitation or dissolution of social institutions considered coercive. Scholars distinguish libertarian views into left-libertarianism and right-libertarianism, on the political axis of socialism-capitalism (left-right, respectively). This distinction implies that libertarians come from different cultural and ideological contexts, which may even be at odds with each other.”

A skein therefore not easy to untangle, a lconsiderable level of complexitywith value systems that go from right to left but above all, as we saw in the previous paragraph, they go from left (struggles for civil rights) to right (battles to limit State interference in the lives of citizens to a minimum).

In fact, there are quite a few cases in which libertarians have taken positions much closer to those of the left, and then become points of reference for the right. Just think of the parable of Nick LandBritish philosopher, writer and blogger, known as the “father of accelerationism”, who went from positions that we could define as progressive to becoming a point of reference for the Alt-Right (far right) which contributed so much to Trump’s re-election.

To delve deeper into the story of Nick Land we recommend:

The relationship between crypto and politics, therefore, is not a simple and linear theme, but certainly the current direction is quite clear and points to the right. So it’s time to go deeper.

The shadow of the Alt-Right on cryptocurrencies

In 2017, therefore during the first Trump presidency, Robert Spencera leading figure of American white supremacist movementdeclared bitcoin “the currency of the Alt-Right.” Let us remember that Alt-Right stands for “alternative right”, a far-right movement born in the United States, but which has connections all over the world. Connections that decentralized finance can financially support, since it allows us to overcome (albeit in part) any problems of traceability of transactions or even of block of the same imposed by governments or supranational institutions.

But in addition to this practical aspect, which for example served to finance the assault on Capitol Hill on January 6, 2021 with bitcoin, there are philosophical and ideological reasons underlying the close relationship between the ultra right and crypto. Privacy has become a primary human right, the idea that states are nothing more than organizations that through their rules oppress white people in favor of everyone else, and so on the various conspiracy theories on different topics.

Deeply rooted and nourished beliefs, which lead to the belief that institutions must be destroyed to become free again. Hence the support for policies such as those implemented by Milei and promised by the next Trump administration, which identify the “enemy” in state agencies, such as healthcare, education and various bureaucratic structures.

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Cryptocurrencies and politics: the differences between Europe and America

We have seen what happens in North, Central and South America, but what is the political approach to crypto in our old one Europa? Are cryptocurrencies right-wing or left-wing here?

The approach to crypto in the Old Continent is, we could say, very European. It is in fact an aregulatory approacha characteristic feature of the EU, which brings with it a series of pros and cons, depending on the perspective from which our policies are observed.

Let’s first talk about the European Crypto Asset Regulation (MiCA)which establishes uniform rules for issuers of crypto-assets not regulated by other financial services acts of the European Union and for providers of services relating to such crypto-assets.

The rules concern:

• transparency and disclosure obligations for the issuance, offering to the public and admission of crypto-assets on a trading platform;
• the authorization and supervision of crypto-asset service providers and issuers of electronic money and asset-linked tokens;
• the functioning, organization and governance of issuers and service providers for crypto-assets;
• protection of crypto-asset holders and customers of service providers;
• measures to prevent insider dealing, illicit disclosure of inside information and market manipulation.

Therefore the European Union and its member countries are aiming at this stage protection of saverswhile politics does not yet seem to be involved in the issue as happens overseas.

And Italy?

The approach of the Italian government is also interesting, which through the proposal to tax capital gains deriving from the purchase and sale of cryptocurrencies at 42% instead of 26% (rate applied to the generality of financial activities), shows a certain hostility at least on the speculative aspects linked to virtual currencies. We would like to point out that the proposal is in the draft of the 2025 Budget Law at the time of writing, but the debate is quite heated so it is not certain that it will see the light in the new year.

In conclusion, European politics, at least that present in the institutions of the States and the Union, does not show particular interest in the topicif not in terms of protecting savers from the risks associated with a highly volatile investment which is necessarily surrounded by potentially fraudulent initiatives, consider the flourishing of Ponzi schemes in the phases of an increase in the value of bitcoin expressed in euros or dollars.

Crypto and politics: we talked about it at FestiValori 2024

We talked extensively about cryptocurrencies and politics during the panel that gives the title to this article, as part of the 2024 edition of FestiValori.

To discuss it with the author of Eticoin we hosted:

• Anna Irreraa journalist who has covered financial technology for more than 10 years. He works at Bloomberg News in London as a Senior Editor in the Crypto team.
• Pietro Mintojournalist, mainly deals with technology and digital culture for Il Foglio, Il Post and Lifegate.
• Silvia Muzziolifull professor of the “Marco Biagi” Department of Economics of the University of Modena and Reggio Emilia. He teaches mathematical methods of economics and actuarial and financial sciences.
• Giovanni PagliaNational economics manager of the Italian Left. From 2013 to 2018 MP and member of the Finance Committee of the Chamber. He works in the credit sector.

A lively and very interesting discussion emerged, of which we leave you the video recording: