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Competition is a good thing—when consumers have a choice, prices go down and quality goes up. And as the pro-consumer party, Democratic policymakers have made a point of championing competition policies in industry after industry, from meatpacking to pharma to tech

But for all the proposed policies floating around on competition (some good and some bad), one industry is missing from the conversation: finance, and specifically the competition that fintech and cryptocurrencies can create for financial products.

Over the past several years, cryptocurrencies have forced banks to compete for financial business, pushing Wall Street’s oldest institutions to up their game on remittances, loans, and other consumer products. Fintechs like Chime have challenged traditional banks to drop junk overdraft fees. Fee-free investment apps, like Robinhood, have created competition for institutions like Charles-Schwab, forcing older companies to drop their trading fees.

But for all the competition that fintechs and crypto have created, for all the consumer options they’ve produced, some Democratic policymakers have maintained ambivalence, skepticism, or even antagonism towards these industries.

One example: The crypto exchange FTX US has an application before the Commodity Futures Trading Commission (CFTC) to provide investors direct access to trading on Bitcoin and Ethereum futures without intermediaries. This new model would bring much-needed competition to the cryptocurrency and derivatives markets. 

Today, traditional financial institutions like the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE) maintain a lucrative position as middlemen in the derivatives marketplace, one which they’re reluctant to give up.

During a House hearing earlier this year, CME Chief Executive, Terry Duffy, testified that FTX’s proposal was "fraught with danger." But far more dangerous is the stranglehold that CME and ICE have over the derivatives market—controlling over ninety percent of trades.

What’s surprising isn’t that CME or ICE would oppose FTX’s proposal for direct-to-consumer derivatives trading. It’s that Democrats might side with entrenched financial institutions on the matter.

During the recent House hearing, several members of Congress repeated financial industry talking points regarding FTX’s proposal.

The Biden Administration has made no secret of prioritizing competition in American markets. According to last year’s crypto Executive Order, the U.S. needs to "reverse”" the economic consolidation constraining the growth and dynamism of our economy. And Democrats have long promoted competition because it helps create more jobs for workers, more choices for consumers, and more innovation to improve the lives of the American people. 

The problem is that too many lawmakers who claim to be supportive of competition are applying competitive principles selectively. They fail to recognize the importance of fostering competition across all sectors, not just where it's convenient. 

Ultimately, if Democrats choose to side with Wall Street over fintech companies and crypto exchanges, the biggest loser will be our nation’s consumers and workers. If Democrats can’t find a way to encourage competition in cryptocurrency markets, the U.S. could lose its leadership position in global financial markets. 

Should this happen, American workers and entrepreneurs will be forced to watch from a distance as the number of high-quality jobs swells in other markets and companies choose to innovate abroad. 

Democrats have a unique opportunity to ensure that cryptocurrency and fintech find their home here in the U.S. The party needs to support policies that promote innovation and competition.

Adam Kovacevich is the founder of a center-left tech industry coalition called Chamber of Progress. Adam has worked at the intersection of tech and politics for 20 years, leading public policy at Google and Lime and serving as a Democratic Hill aide.

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