Recently, we witnessed the incoming president of the United States issue his own cryptocurrency before his inauguration. Not to be outdone, the incoming first lady issued her own cryptocurrency within forty-eight hours of her husband. In the wake of these cryptocurrency issuances, questions have been raised about the transparency attached to who purchases the cryptocurrencies and whether the purchases might be used to influence official Presidential actions.
What do “Trumpcoin” and “Melaniacoin” have to do with Virginia? Let me explain.
Virginia’s Conflict of Interests Act states that our system of representative government is dependent upon legislators representing the public “fully” in order to ensure “its citizens maintaining the highest trust in their public officers.” A component of cementing that trust is for citizens to know what private interests a lawmaker has when they consider legislation.
The cornerstone of this public knowledge is the Statement of Economic Interests that each legislator is required to submit on an annual basis. The form requires legislators to disclose their holdings in assets such as equities, real estate and businesses.
However, there is a rapidly developing financial asset that is not subject to disclosure on the current form: digital assets. A lawmaker could potentially have millions of dollars in Bitcoin or Ethereum or Dogecoin or another cryptocurrency and not have to reveal the fact to the public.
In fact, if our governor or another elected official decided to issue their own cryptocurrency (Glenncoin, anyone? If that’s not to your political liking, how about Lucascoin?), they would not need to disclose how much of that cryptocurrency they owned on their Statement of Economic Interests.
Luckily, for Virginians interested in greater transparency, Senator Saddam Salim, D-Fairfax County, has introduced Senate Bill 1170 to require that lawmakers disclose their digital asset holdings on the Statement of Economic Interests. Digital assets encompass cryptocurrencies as well as other assets tied to blockchain technology.
Why does disclosure of digital assets matter besides the possibility of Virginia’s elected officials issuing their own cryptocurrency? The 2024 presidential election offers a good example of how the economy is changing and the rising importance of cryptocurrencies.
You may have noticed that in the months leading up to the 2024 presidential election, some media outlets started to talk about a measurement besides public opinion polls in terms of which candidate stood a better chance of winning the election. That measurement was prediction markets. I noticed in October that many of the financial news outlets that I patronized, including the Wall Street Journal, were increasingly mentioning the prediction markets in their coverage of the election.
What you may not have noticed is that the most highly visible U.S. election prediction market, Polymarket, had $3.2 billion in “bets” placed on the outcome of the election, according to Fortune magazine. Even more interesting is the fact that Polymarket does not accept U.S. dollars for placing a bet. Instead, the platform only accepts cryptocurrency.
In essence, by the end of the 2024 campaign, we witnessed major media outlets covering a crypto-only betting market in the same breath as campaign polls of registered American voters. Talk about an enormous change in the four years between the 2020 and 2024 presidential elections.
Betting markets aren’t the only outlet for digital assets. Retailers such as Starbucks and Whole Foods now accept cryptocurrency payments. On January 7, Fidelity released a report predicting more nation-states and central banks would establish positions in Bitcoin in 2025. Additionally, the incoming Trump administration has stated its desire to establish a Bitcoin Strategic Reserve.
The activities make it clear that federal and state legislators will regulate a number of new crypto-oriented markets and payment services in the coming years. A couple of hypothetical examples demonstrate how these issues will probably be coming sooner rather than later to the attention of legislators. First, will legislators authorize or regulate crypto payments for online sports betting books? Second, will legislators authorize the payment of taxes or other government fees with cryptocurrencies?
These are just two examples of potential public policy decisions involving cryptocurrencies. Lawmakers who own substantial amounts of cryptocurrencies may see significant gains in their net worth if regulatory changes favor cryptocurrencies in general or one specific cryptocurrency. The public should have an idea if a regulatory change favoring the use of cryptocurrencies might benefit a particular legislator with substantial holdings in the digital asset.
Senator Salim’s bill will provide the public with information about a lawmaker’s digital assets and prevent the occlusion or omission of this information from the public. Senate Bill 1170 is a commonsense bill that will help build trust and accountability in our government. I urge the General Assembly to adopt this bill and for Governor Youngkin to sign it.
John Blair grew up in Pittsylvania County. He is the current city attorney for Staunton and previously served as the city attorney for Charlottesville and the county attorney for Dinwiddie County.
John Blair grew up in Pittsylvania County. He is the current City Attorney for Staunton and previously… More by John Blair
