Crypto industry's political spending starts to pay off

US lawmakers who benefited from crypto largess in the 2024 election are speedily advancing the industry's agenda, writes David Yaffe-Bellany from Washington

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At the end of a three-hour hearing last month, Sen Ruben Gallego, Democrat of Arizona, sided with a group of Republicans in a hotly contested debate. He voted to advance the Genius Act, a bill backed by the cryptocurrency industry.

"It's clear that digital assets are here to stay," Mr Gallego said after the Senate Banking Committee hearing. Breaking from the committee's top Democrat, he called the bill a "step in the right direction."

The vote, 18 to 6, was only preliminary, advancing a bill that will require approval from the full Senate. But in the crypto world, it was celebrated as a moment of vindication.

Mr Gallego is part of an increasingly influential cohort in Congress: beneficiaries of the crypto industry's largess. During a tight Senate race last year, he was aided by $10 million from super Pacs financed by three large crypto companies, including the Coinbase digital currency exchange. The money funded ads that promoted Mr Gallego's military service and support for border enforcement.

Now he and dozens of other lawmakers supported by the super Pacs are taking steps in Congress to advance crypto priorities, handing a series of long-awaited victories to an industry with an extensive history of fraud and volatility.

In the Senate, these legislators have thrown support behind the Genius Act, which would pave the way for businesses to issue stablecoins, a digital currency designed to maintain a price of $1. And in both chambers, they have voted to repeal a Biden-era rule that required crypto firms to report certain tax information to the Internal Revenue Service.

An industry spending millions of dollars to influence Congress is hardly unusual. But crypto's political machine has stood out for the scale of its spending - and the speed of the results.