Kalshi faces stiff competition from other platforms like Polymarket and Robinhood who have their own election betting options. Meanwhile, Paxos CEO Charles Cascarilla urged U.S. candidates to embrace stablecoins to modernize financial systems and maintain the dollar's dominance. Ripple’s Chris Larsen endorsed Kamala Harris again in an interview due to her crypto-friendly stance. Crypto-focused PACs like Fairshake are also still heavily influencing key congressional races even though the election is just days away. The PAC now hopes to secure some pro-crypto allies in Wisconsin.
Kalshi Introduces USDC Deposits
The prediction market Kalshi is gearing up for the upcoming U.S. elections by introducing USD Coin (USDC) deposits to attract more users. The news was confirmed by the platform on Oct. 28. The new crypto deposit option will be powered by ZeroHash for offramping.
Kalshi is fighting for an edge to remain competitive in the crowded prediction market space. The market is currently dominated by Polymarket, which is a Web3 platform that surged ahead with a huge lead, especially in the political betting sector.
Kalshi also recently launched contracts for betting on U.S. election outcomes after a pivotal court victory in September, which granted it the first U.S. license to operate an election prediction market. This regulatory milestone opens the door for other platforms, like Polymarket, to potentially enter the political betting space legally. On Oct. 28, Robinhood also joined the fray and revealed contracts that allow certain users to bet on the election outcome between Vice President Kamala Harris and Republican candidate Donald Trump.
The stakes in these prediction markets are very high. Polymarket already recorded close to $2.6 billion in wagers on the November election on Oct. 23. Kalshi’s own election market amassed around $87 million in betting volume since listing on Oct. 7. Both platforms show very strong support for Trump as the former president holds odds of 66% on Polymarket and 64% on Kalshi.
Trump vs Harris election odds (Source; Polymarket)
Although election prediction markets have faced a lot of scrutiny from U.S. regulators over concerns that they could compromise election integrity, many analysts argue these platforms actually gauge public sentiment much more accurately than traditional polling methods.
Paxos CEO Urges U.S. to Embrace Stablecoins
Kalshi’s acceptance of USDC came at the perfect time as Paxos CEO Charles Cascarilla recently urged leading U.S. presidential candidates to embrace stablecoins to boost the U.S. dollar’s global dominance and enhance the traditional banking system’s efficiency. His open letter was published on Oct. 29, and it placed a lot of emphasis on how the next administration could influence America’s role in the global financial arena.
Cascarilla believes that blockchain and stablecoins are transforming financial systems by integrating with the internet to make transactions much more efficient and inclusive. According to him, “Stablecoins or digital dollars—U.S. dollars digitized via blockchain technology—are the crucial upgrade for the payment system that will revolutionize money movement, allow greater participation in the global economy and ensure the supremacy of the U.S. dollar for years to come.”
This call to action happened just days before the U.S. presidential election, which may shape the industry over the next four years. Former President Donald Trump is considered to be the more crypto-friendly candidate, and could potentially favor a lighter regulatory approach compared to Vice President Kamala Harris. Cascarilla also pointed out some of the inefficiencies in the current banking system, and compared it to outdated postal services. Overall, he encouraged the U.S. to adopt blockchain technology to modernize financial operations.
Additionally, Cascarilla pointed to data that shows more than 20% of the U.S. population and 40% of the global population are still unbanked or underbanked as they lack access to essential financial services like loans and savings. Blockchain technology, he argued, could provide accessible financial services to anyone with a smartphone or internet access, especially in regions without established banking infrastructure.
The U.S. may also be falling behind in crypto regulation, as Europe’s Markets in Crypto-Assets Regulation (MiCA) is getting close to implementation. MiCA will be the first comprehensive regulatory framework for digital assets worldwide.
However, MiCA’s bank reserve requirements raised concerns. Tether CEO Paolo Ardoino believes that MiCA’s rules could introduce systemic banking risks for stablecoins by requiring reserves to be held in traditional banks. In a recent interview, Ardoino explained that banks will be able to lend out a large portion of these stablecoin reserves, which could potentially impact stability if banks encounter financial difficulties.
Chris Larsen Still Backs Kamala Harris
Chris Larsen, the co-founder and chair of Ripple, yet again publicly endorsed Kamala Harris for the U.S. presidency because of her supportive stance on crypto policy. In an Oct. 28 interview with CNBC, Larsen shared that he is very confident that Harris’s administration will encourage and grow U.S.-based innovation, particularly considering her background in the tech-rich Bay Area. He also weighed her approach against what he called the Biden administration’s failed policies. He also claimed Biden’s policies were overly influenced by Senator Elizabeth Warren, which created challenges for the crypto industry.
Larsen contributed around $12 million in support of Harris through political action committees (PACs), largely in XRP. This placed him well ahead of other crypto industry figures like the Winklevoss twins, who also donated close to $2 million to PACs supporting Donald Trump.
Ripple and other crypto firms channeled support through PACs, both in direct donations and media campaigns for congressional candidates ahead of the 2024 election. Fairshake, which is a PAC backed by Coinbase and Ripple, has been particularly active and it spent millions to influence tight congressional races by supporting both Republican and Democratic candidates in key Senate and House races.
Despite Fairshake’s support for Republicans in several instances, Larsen stated that his contribution to Harris helps balance the industry’s bipartisan influence. Some of the most high-profile elections impacted by crypto PAC donations include the Massachusetts Senate race between Elizabeth Warren and John Deaton, as well as the Ohio Senate race between Bernie Moreno and Sherrod Brown.
Fairshake PAC Makes One of Its Last Election Moves
The crypto-focused PAC, Fairshake, recently reported one of its last major expenditures before Election Day. It spent over $760,000 on a media campaign in support of Republican Representative Bryan Steil in Wisconsin’s 1st congressional district.
With only a week until U.S. voters head to the polls, this media buy could be one of Fairshake’s final moves in the 2024 election. Steil has represented Wisconsin in Congress since 2019, and has shown support for pro-crypto policies. He even voted for the Financial Innovation and Technology for the 21st Century Act and challenged an SEC accounting guideline that was against the crypto industry. Steil will be facing off against Democrat Peter Barca, and currently leads by a narrow margin.
All 435 House seats are up for election, and control of the chamber is uncertain. However, Republicans hold a slim majority. PACs like Fairshake are investing heavily to support candidates with more favorable crypto stances to gain legislative allies or counter those who are seen as potentially harmful to the industry.
