Key Takeaways
- Greg Tanaka is a crypto advocate running for Congress in the upcoming midterm elections.
- Tanaka believes in championing “legislation for the digital age” and says he wants to “kill” the crypto-related language used in the controversial Infrastructure Bill.
- With a candidate who has served in Congress since 1993 as competition, Tanaka faces a big challenge but is nonetheless optimistic.
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Midterm elections are heating up for primary season, and this year crypto is on the ballot. Crypto Briefing sat down with Greg Tanaka, a crypto advocate running for Congress in California’s 16th District, to hear about his campaign, his hopes for future legislation, and what it will take to win.
Money and State
With 53% of Americans believing that crypto is the “future of finance” and a record 27 million of them holding cryptocurrency today, crypto is a much hotter political topic in 2022 than ever before. Between the increased interest among the public and the heightened attention of regulators and lawmakers, the fight for crypto’s future was bound to make its way to the Hill sooner rather than later.
Until recently, crypto’s place in U.S. politics had been relatively hands-off. Crypto-friendly candidates were few and far between, and crypto lobbying efforts have been comparatively sparse next to those of say, the fossil fuel industries. The crypto industry spent $9.6 million on lobbying efforts between 2017 and 2021—a drop in the ocean compared to the estimated $126 million spent on oil and gas lobbying in 2019 alone, or the $57 million spent by the commercial banking lobby in 2021. Next to traditional influence efforts in D.C., the crypto industry’s presence in Washington is peanuts.
Perhaps that’s been due to the average crypto enthusiast’s resentment of politics. However, everything changed last year with the passage of Infrastructure Investment and Jobs Act—often simply called the “Infrastructure Bill,” which is now very much an Infrastructure Law. That legislation, which will pour over $1 trillion into America’s roads, railways, and bridges over the next decade, also contains language that broadens the government’s definition of a “broker” to include virtually any participant in a blockchain network and introduces new tax reporting requirements for digital assets that critics have deemed unworkable.
While it remains to be seen how much more money will be poured into crypto advocacy over the course of 2022, a few crypto enthusiasts are answering the call to public service and running for office themselves. Among them is Palo Alto City Councilman Greg Tanaka, a Silicon Valley tech entrepreneur and crypto evangelist who believes that the financial innovation made possible by blockchain technology may be the very thing that saves this nation from itself.
Legislation for the Digital Age
Greg Tanaka is running for Congress as a Democrat in California’s 16th District—formerly the 18th, before this year’s effective redistricting. The incumbent, Anna Eshoo, has served in Congress since 1993 when she was first elected to California’s 14th District.
Tanaka emphasizes the difference in backgrounds between himself and Eshoo, whom he calls a “professional politician.” A glance at her resume would suggest that he’s not necessarily wrong. Eshoo graduated from Cañada College in 1975 and by 1978 she was Chair of the San Mateo Democratic Party; after a brief stint as Chief of Staff to California State Assembly Speaker pro tempore Leo McCarthy in the early 1980s, she unsuccessfully ran for Congress in 1988 but had more luck when she tried again in 1992. She was sworn in the following year and has been there ever since.
Tanaka, on the other hand, is an entrepreneur, something that ought to ingratiate him with tech aficionados, libertarians, and conservative Democrats alike. His DeFi project, Mozaic Finance, is not yet operational but promises to use AI to actively manage portfolios of tokens that are then invested into Avalanche liquidity pools. Tanaka says the protocol will use machine learning in attempt to guess not only the future price of tokens, but also the predict the future yields of various pools and auto-allocate accordingly. A big promise, and if there’s one thing that politicians and entrepreneurs have in common, it’s a penchant for big promises.
Championing what he calls “legislation for the digital age,” Tanaka plans to make bold moves in support of cryptocurrency innovation in the U.S. If elected, Tanaka says his first objective is to “kill” the problematic language in the Infrastructure Act, which he highlights as a particular example of a fundamental misunderstanding of the technology on the part of legislators (he has time to do it, too—the provisions in question are not set to take effect until 2024.) Tanaka also proposes a capital gains tax holiday of undetermined length on all crypto assets, as well as the adoption of cryptocurrency as legal tender.
Tanaka on Running for Congress in 2022
“What I’m advocating is letting cryptocurrencies flourish,” Tanaka says, in what could be styled a laissez-faire attitude toward the entire industry. He envisions a future in which value is able to freely float between several cryptocurrencies and users manage a portfolio of digital assets to trade or make purchases with on a day-to-day basis. Such a future would retain a place for fiat currency and might even be one in which the U.S. dollar remains the world reserve currency, but it would be complimented by a host of cryptocurrencies across which the average American could diversify their wealth and mitigate risks associated with rising costs.
Tanaka is also fascinated by DAOs and is optimistic about their utility in a functioning society. He likens their structure to that of a company and a national government in which the DAO can elect representatives through direct elections who then themselves vote on the nuts and bolts of governance. Key differences, however, include access to the electoral process and, perhaps more importantly, a sense of ownership.
“The reason why democracies are good is not because it’s a bunch of smart people voting. The reason why democracies work is because you get buy-in, and that buy-in is so important,” he says. The people, Tanaka argues, have to feel they’ve purchased a tiny bit of ownership over their own government. Beyond their vote for Senator or Congressperson, American taxpayers are currently powerless over how that money is allocated, as the “power of the purse” is expressly granted to Congress by the Constitution. As Tanaka is quick to note, however, the Constitution is a product of the 18th Century, when the technological limitations of quill-and-parchment correspondence sent via horseback rendered direct voting on every expenditure unrealistic. With distributed ledger technology, that prospect becomes much more feasible.
If DAOs are the social organizational structure of Tanaka’s future, smart contracts are its law. Tanaka rhapsodically envisions a future in which traditional laws are replaced with smart contracts on Ethereum, and judges and juries replaced with lines of code. He says:
“I think if Elon [Musk] were to successfully colonize Mars, would the Constitution be written on a piece of paper, on parchment, or would be a smart contract on Ethereum? I would almost argue that the Constitution—laws—today should be a smart contract.”
Tanaka paints a utopian picture of a government run on smart contracts, and goes on to remark that with the law executed on the blockchain, the need for judges, juries, and lawyers would be a thing of the past. When asked what would be done for cases in which a human judgment was necessary to make a call, his answer was simple—it would be a job for the DAO.
An Uphill Battle
Lest the reader suspect that Tanaka is a single-issue candidate, it should be noted that his full campaign platform concerns more than simple cryptocurrency advocacy. Among his other legislative concerns will be bringing down the costs of healthcare, advancing nuclear energy technology, and implementing a “COVID Restart” program that would provide a relief for small companies struggling to resume business in a post-pandemic world. He also advocates for a global minimum tax on all multinational corporations.
Tanaka’s run for Congress is uphill climb. A lesser-known candidate going up against a 29-year incumbent would be difficult enough, but Tanaka also faces six other candidates in the Jun. 7 primary (the two candidates with the most votes, regardless of party, will advance to the general election in November). Furthermore, Eshoo herself is bringing in serious money to her campaign: she’s already raised over $1 million going into April, and counts the likes of Google parent company Alphabet, Inc. among her largest donors.
Tanaka is accordingly realistic and recognizes that the success of his campaign will require tremendous effort, both on his part and from the broader crypto community. Pointing out that incumbents benefit from the free media associated with their public visibility, Tanaka says it takes significant resources to level the playing field:
“To beat them, you need just a ton of money. We need people to donate, we need people to volunteer, we need to get the word out. Because, you know, the truth is that most of the congress members out there are totally oblivious to crypto. They see it as a money source or as something nefarious—so they don’t see the opportunity.”
Tanaka’s immediate goal, then, is to rally support, and soon. With June’s primary right around the corner and his primary opponent’s war chest swelling with cash, Tanaka’s candidacy faces significant challenges in the months ahead. Still, the city councilman seems undeterred. “She’s not going to be knocking on doors like I am,” he says.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
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