Coinbase, the largest cryptocurrency exchange in the United States that offers both bitcoin (BTC-USD) and bitcoin cash (BCH-USD) trading, has announced the formation of a political action committee (PAC).
Entry into the political arena
The new arm will mark the exchange’s first entry into the political arena and will be tasked with mobilizing funds to be used in future US elections. The exchange announced the formation of a new outfit in a public filing on Friday. Coinbase said that the PAC had not raised any cash as of June 30.
Attracting more institutional investors
In May, Coinbase announced that it was developing trading technologies and new services that would attract more institutional investors. Coinbase is mainly targeting hedge funds and high-volume trading companies.
In the US, a PAC is any organization that collects donations from its members and then uses the donations in a political campaign. The end mission is to influence the outcome of the election. These organizations are covered under the Federal Election Campaign Act 1974. Political Action Committees support political candidates with whom they share objectives, ideological viewpoints and policies.
What Coinbase seeks to achieve from the PAC
Coinbase is seeking to use its PAC to access politicians who have a lot of influence over financial regulatory policy. The American political and financial class has historically viewed digital currencies with a lot of suspicion. Dialogue would help seal this gap, bringing both politician and players in the crypto space to the table to formulate joint policies. This partnership come in the form of support to election candidates who echo similar views.
With the cryptocurrency industry currently held in uncertainty regarding regulation, a PAC could play a vital role in opening channels to directly engage with politicians who influence and formulate policies. Some of the points that will form the basis of such partnerships include promotion of crypto and blockchain industries, the contribution of the crypto industry in job creation and regulatory clarity. Before the formation of the PAC, Coinbase has been known for engaging the political class through donations to candidates with a pro-business agenda.