Virginia's Legislative Leap: Will Cryptocurrency Holdings of Lawmakers Finally Be Disclosed?

The Emergence of Cryptocurrency in Politics

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.

Virginia’s Conflict of Interests Act

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” 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 annually. The form requires legislators to disclose their holdings in assets such as equities, real estate, and businesses.

The Rise of Digital Assets

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, Ethereum, 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?), they would not need to disclose how much of that cryptocurrency they owned on their Statement of Economic Interests.

Senate Bill 1170: A Step Towards Transparency

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? The 2024 presidential election offers a good example of how the economy is changing and the rising importance of cryptocurrencies. Some media outlets started to mention a new measurement besides public opinion polls in terms of which candidate stood a better chance of winning the election: prediction markets.

The Impact of Prediction Markets

The most highly visible U.S. election prediction market, Polymarket, had $3.2 billion in “bets” placed on the election outcome. Interestingly, Polymarket does not accept U.S. dollars; it only accepts cryptocurrency.

By the end of the 2024 campaign, we witnessed major media outlets covering a crypto-only betting market alongside campaign polls of registered American voters, marking an enormous change since the 2020 elections.

Retailers such as Starbucks and Whole Foods now accept cryptocurrency payments. On January 7, Fidelity predicted that more nation-states and central banks would establish positions in Bitcoin by 2025, while the incoming Trump administration expressed its desire to establish a Bitcoin Strategic Reserve.

Legislative Challenges Ahead

These activities indicate that federal and state legislators will regulate a number of new crypto-oriented markets and payment services in the coming years. For example, will legislators authorize or regulate crypto payments for online sports betting? Will they allow the payment of taxes or government fees with cryptocurrencies?

Senator Salim’s bill will provide the public with information about a lawmaker’s digital assets and prevent the concealment of this information. 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.