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Political donations by cryptocurrency are on the rise

AYESHA RASCOE, HOST:

Cryptocurrency is becoming more and more mainstream. A recent survey by the business research company Morning Consult found that 20% of American adults own cryptocurrency. With that growth has come another - a rise in donations by cryptocurrency executives and investors to political candidates friendly to the new industry. Tory Newmyer took a closer look at those donations for this year's midterm elections for The Washington Post and joins us now. Welcome.

TORY NEWMYER: Thanks for having me.

RASCOE: So this isn't necessarily a new trend. Individuals with ties to cryptocurrency have made donations to candidates in the past. But is there something different about this year and the upcoming midterms?

NEWMYER: The difference, I think, is the scale of the giving and the fact that it's organized. So the industry has really grown at a super-fast pace over the last few years. I mean, at this point in the last election cycle, the industry was an eighth as big as it is now. So the industry is planning to make a really big splash in the midterm elections. They are organizing super PACs. They're organizing fundraisers for key members of Congress. They are finding new candidates who are emerging and getting behind them early. And they are going to be spending tens of millions of dollars sort of announcing themselves as not just an economic force, but a political one, too.

RASCOE: And so who are these pro-crypto candidates that are being targeted by these super PACs?

NEWMYER: This is a range of candidates across the ideological spectrum. So there's a candidate named Blake Masters who's running for Senate in Utah - very right wing. You know, there's sort of a libertarian ethos around Bitcoin and, for that reason, it appeals to - tends to attract people from the right wing. There are other candidates on the progressive left, like Aarika Rhodes. And she says there is a progressive case to be made for the technology because it has the potential to disrupt traditional finance and traditional tech and give consumers faster, cheaper access to these services. So the industry is being very opportunistic. They are wary of this becoming a partisan issue, and so they are spreading their money on both sides of the aisle.

RASCOE: Are there lawmakers who are anti or critical of the crypto industry?

NEWMYER: So it's been an interesting dynamic on the Hill, where Republicans, by and large, have been very accepting, enthusiastic of crypto. Democrats have been much more split. You hear this a lot from leading progressives like Elizabeth Warren and Sherrod Brown, who say this whole thing is a hype-driven house of cards that is only enriching people who are already rich. And in the meantime, the mining of Bitcoin, which is still the most popular crypto in the world, is gobbling up, you know, eye-popping amounts of electricity and contributing to climate change. And the only thing that the technology has really achieved to date is enabled illicit finance. And so they don't see any real redeeming value here and have taken a very aggressive, critical posture towards the whole enterprise.

RASCOE: And, of course, the reason why people pay attention to when industries start giving money is because they're not giving money just out of the goodness of their hearts. Like, what are they trying to achieve by backing these candidates?

NEWMYER: I mean, they recognize that the people that they are backing are, if they get to Washington, going to be writing rules for the industry. And it's a really remarkable moment for this industry because it has really come out of nowhere to become this major sort of market force. And so the industry is very keen to be at the table while these rules are getting written to make sure they're crafted in such a way that it's favorable to them.

RASCOE: Tory Newmyer is a business reporter with The Washington Post. Thank you so much for sharing your reporting.

NEWMYER: Thanks for having me. Transcript provided by NPR, Copyright NPR.