Republican presidential candidate Vivek Ramaswamy is betting big on digital currency Bitcoin for campaign donations, and he’s also unveiling a new proposal to roll back tax restrictions on mining the currency in the U.S.
“The thriving Bitcoin universe should actually better empower me to do what I want to do as the U.S. president, which is to stabilize the U.S. dollar as a unit of measurement and put the Federal Reserve back in its place with that as its single mandate,” Ramaswamy said in an exclusive interview with CBS News. (He would dispense with the Fed’s dual mandate of stabilizing currency and maximum employment to have it focus on the former.)
Ramaswamy plans to debut his new Bitcoin policy this Saturday at the annual Bitcoin 2023 conference in Miami.
The business entrepreneur won’t be the first presidential candidate to allow digital currency for donations to his campaign. That distinction belongs to Sen. Rand Paul, who accepted Bitcoin donations in his 2016 White House campaign.
President Biden, Senator Tim Scott, former U.N. Ambassador and South Carolina Governor Nikki Haley and Former President Donald Trump are not accepting cryptocurrency donations. However, Trump, who is leading in Republican primary polls, did issue non-fungible tokens — commonly known as NFTs — last fall and reportedly personally earned up to $1 million from selling the unique digital assets.
Ramaswamy has no plans to unveil his own NFTs for personal profit or his campaign.
“Right now, I’m more focused on policy. It also just gives people the choice to donate to the campaign in Bitcoin and signal that we’re not threatened by it,” he said.
A core tenet of Ramaswamy’s proposal would be the freedom to mine Bitcoin in the U.S.
Harvesting the digital currency is a costly, energy-draining process. The U.S. recently eclipsed China as the premier location for harvesting the digital coin after Beijing in 2021 pushed out companies mining the digital currency to cut energy consumption.
The Biden administration recently proposed a 30% tax on electricity used by cryptocurrency mining operations in its budget for the fiscal year of 2024.
“I think that it’s wrong and unfair and is not an appropriate use of federal power,” Ramaswamy said. But there is little chance that Congress would pass a new tax on electricity consumed by cryptocurrency mining, especially since the House is controlled by Republicans.
The entrepreneur said the freedom to mine would be the “base principle that it is unfair and counterproductive to target Bitcoin miners as different from any other consumer of energy, period.”
“We’ll put that into the rules and preserve freedom to mine by rescinding and committing against any special taxes for the utilization of energy for purposes of mining,” he said.
Ramaswamy’s proposal would also codify that Bitcoin and similar coins would not be treated as a security, which he says would allow it to be “a parallel currency.” Bitcoin has skyrocketed in value within the last decade, but remains highly volatile due to uncertainty in the cryptocurrency markets and government regulation.
Nonetheless, he argues cryptocurrency can provide an alternative to Americans wary about the strength of the U.S. dollar.
“The insecurities that the defenders of fiat money have with respect to the rise of Bitcoin is similar to the insecurities that I see amongst public schools and the teachers unions and the administrators of public schools with respect to school choice,” Ramaswamy said. “I will be the opposite of what public schools are to school choice.”
The state of cryptocurrency in the U.S.
Washington is pushing for greater regulation and oversight of cryptocurrencies after the collapse of FTX, a cryptocurrency hedge fund and crypto-exchange site, in November 2022. Shortly after, FTX founder Sam Bankman-Fried was arrested and charged with securities fraud, money laundering and campaign finance violations.
The cryptocurrency company lost about $9 billion of customer funds. A string of other industry players have declared bankruptcy over the last year, including BlockFi, Celsius Network, Genesis Global Capital, Three Arrows Capital and Voyager Digital.
Gary Gensler, the chair of the U.S. Securities and Exchange Commission, testified before Congress in April about the state of the cryptocurrency market and clashed with Republicans over a proposed requirement that companies disclose information related to climate-related risks and greenhouse gas emissions.
The cryptocurrency market has fluctuated wildly in recent years, but is currently a $1.7 trillion industry. Bitcoin has the largest share of that market, with about $518 billion in securities.