Bloomberg thrills fintech world with cryptocurrency shoutout

Democratic candidate calls for clarifying cryptocurrency regulations, establishing a framework for initial coin offerings

Former New York Mayor Mike Bloomberg, a Democratic presidential candidate, speaks during the U.S Conference of Mayors' 88th Winter Meeting in Washington on Jan. 22, 2020. (Tom Williams/CQ Roll Call file photo)
Former New York Mayor Mike Bloomberg, a Democratic presidential candidate, speaks during the U.S Conference of Mayors' 88th Winter Meeting in Washington on Jan. 22, 2020. (Tom Williams/CQ Roll Call file photo)
Posted March 3, 2020 at 6:00am

It’s just three sentences and five bullet points, not even 100 words, but Mike Bloomberg’s platform for cryptocurrencies has the nascent technology’s boosters cheering and champing at the bit for more.  

“We really like it. We think it’s great that he’s thinking about these issues,” said Kristin Smith, executive director of the Blockchain Association, an industry trade group. “Hopefully, that’ll spur some others [candidates] to get involved.” 

“Bloomberg’s policy positions on cryptocurrency are a breath of fresh air compared to what we’ve got right now,” said Daniel Gouldman, the CEO and founder of Ternio, a blockchain-based payments startup based in Atlanta.   

Bloomberg released a nine-page policy memo on financial regulations just before the Nevada debate last month. Pundits saw it as an attempt by the billionaire, whose name is virtually synonymous with finance thanks to his eponymous trading terminals, to distance himself from Wall Street.  

Besides proposing a financial transaction tax and postal banking — both ideas fiercely opposed by banks and backed by Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts — Bloomberg’s platform mostly promised the Democratic policy minimum: reversing Trump’s deregulatory changes and returning to the Obama-administration’s rule regime.  

But Bloomberg differentiated himself from the Democratic pack with calls for clarifying cryptocurrency regulations, establishing a framework for initial coin offerings, defining how to tax digital assets, and making capital rules for banks holding tokens. 

Bloomberg’s “policy people are trying to think through how to parse this all out. They want to look tough on Wall Street,” said Mike Lux, a cofounder of Democracy Partners, a progressive campaign consultancy. “He’s moving toward a more progressive direction, and of course I’m glad he is. But I think on cryptocurrency he wants to leave things open enough.”  

Loading the player...

Most of the remaining Democratic field hasn’t talked about the blockchain-based industry. 

That may be because most voters remain unfamiliar with blockchain technologies: A July 2019 poll by CivicScience found that 66 percent of Americans were uninterested in cryptocurrencies, and another 21 percent had never heard of them. The poll was conducted a month after Facebook Inc. proposed its Libra cryptocurrency, drawing wide media coverage. Other surveys have found somewhat wider interest in digital currencies, but still consistently show less than 10 percent of Americans have personally owned a cryptocurrency.   

Digital currencies, despite considerable growth in the decade since bitcoin’s invention, remain small compared to the rest of the financial world. CoinMarketCap estimated the total market capitalization for cryptocurrencies at $253 billion as of March 2. For comparison, the market cap of  Microsoft Corp. alone topped $1.28 trillion the same day.   

[Congress looks at taxes, oversight, crime in fintech bills]

But making policy bets on a niche issue like crypto can still pay political dividends, Lux said.

“I’m sure that he [Bloomberg] will want to show himself as pro-innovation…. Innovation is a pretty popular word in American politics,” said Lux, who isn’t working for any campaigns but supports Warren. “I think for those up-and-coming professional types who like technology and like innovation, it’s a good thing to push.”

Contrast with Trump

Bloomberg can also draw another contrast by supporting crypto, said Gouldman. “When it comes to crypto — Bloomberg beats Trump hands down,” he said. As with so many other things, Trump has been an outspoken critic of crypto, taking to Twitter to badmouth bitcoin and Libra.  

Bloomberg has always been more of a tech geek than a Wall Street guy. He made his billions by selling his terminals, not stocks or bonds. His motto? “In God we trust. Everyone else bring data.”

Bloomberg’s campaign did not respond to requests for comment.   

He’s been a major investor in tech startups for years and even started his own in 2019 — hiring the former CEO of Foursquare and former chief marketing officer of Facebook to run Hawkfish LLC, a digital ad firm separate from the campaign and created specifically to counter the Trump campaign’s online political prowess.

Those connections help explain Bloomberg’s interest in crypto policy, said Smith, noting that his former campaign adviser, Bradley Tusk, is one of the crypto world’s more prominent cheerleaders with investments in Coinbase and Ripple, among other blockchain startups.  

The crypto policies could also just come down to the candidate’s personal beliefs, said Lux. “Bloomberg, historically, has been extremely close to the biggest tech companies.”  

On that score, Bloomberg also stands out from his competition. Sanders, who currently leads in delegates for the Democratic nomination, is no friend of big tech. He has called for increased antitrust scrutiny and frequently criticized Amazon.com for not paying workers or the Internal Revenue Service enough. Having a cryptocurrency platform could help Bloomberg with Super Tuesday voters in tech hubs like Boston and Austin.

But trying to win ambitious young professionals can be tough if you’re affiliated with the sector’s behemoths, Lux said. 

“The problem with big tech is that it’s not entrepreneurial anymore,” Lux said. “I’m sure with the cryptocurrency thing, he’s saying he wants people to innovate.”  

With huge sums of cash, Bloomberg can afford a leave-no-stone-unturned approach to courting support. His campaign has hired a legion of staffers, paid Instagram influencers to signal-boost his message, and flooded the airwaves with hundreds of millions of dollars in ads. Including a few lines in a policy proposal aimed at a small audience of crypto-enthusiasts could play into that.  

But Gouldman, who also does digital advertising for Democracy Partners, doesn’t think having a digital token platform will ultimately win Bloomberg many voters.

“I don’t believe a person’s stance on crypto is going to have a big impact on a person’s vote,” he said, saying that the politics of the guys — it’s mostly men — in the crypto community most likely track broader voting patterns by race: “Whites tend to vote Republican, non-whites tend to vote Democratic.”

And if money is any guide, the tech sector’s employees are feeling the Bern. Sanders raised more from employees of Google, Amazon, Apple, Facebook and Twitter than anyone else in the last quarter of 2019, per a Recode analysis.