India and China discourage their citizens from participating in cryptocurrency, yet they see strong adoption nevertheless.

Why it matters: The two countries are cases for updated research on regulation around the world that shows people are going to find a way to buy cryptocurrency.

The Atlantic Council, which is tracking crypto regulation in 60 nations, assessed their impacts using data from Chainalysis, the leading crypto tracking company.

• It found that whole or partial bans are "weakly correlated" with reducing participation.

By the numbers: 33 nations legalized holding cryptocurrency and 27 generally or partially banned it.

• The world's two most populous nations have strong crypto sectors despite governments that have discouraged the industry.

China

China began its crackdown in 2017. Beijing has restricted certain activities, such as financial firms facilitating payments in cryptocurrency or using blockchains to raise money for startups.

• Owning cryptocurrency has not been outright prohibited.
• Chainalysis estimated $86.4 billion in peer-to-peer transactions in China over 12 months through June 2023.
• China also has one of the largest numbers of people who own cryptocurrency in the world.

The intrigue: Some of the most important businesses in the sector are rooted in China.

• Perhaps most crucially, Beijing-based Bitmain is far and away the market leader in manufacturing Bitcoin mining equipment. What Nvidia is to AI, Bitmain is to Bitcoin.
• Three of the biggest cryptocurrency exchanges in the world, Binance, HTX (formerly Huobi) and OKX, started in China.

India

In 2018, India's banking authority banned banks from supporting cryptocurrency trading and investing, though it was reversed by the court in 2020, as more citizens piled into the market.

• The nation then opted for severe taxes on traders: 30% on all profits from any trade and a 1% transaction tax on most of them.
• Then at the end of 2023, regulators kicked multiple exchanges out of the country, following Coinbase's exit amid the terra stablecoin fallout.
• Nevertheless, Chainalysis ranked India highest in grassroots adoption last year.

Friction point: While India lacks major crypto firms with global reach like China, it may have the largest addressable market, despite its government's ambivalence.

• The latest: The steep taxes stand, with the domestic industry now focusing on pushing changes in the 2024-25 fiscal year.

Reality check: "Bringing crypto-activity within [a] regulatory perimeter and making it realistically enforceable (clear authorities, laws, and enforcement capacity) is necessary for the safe development of domestic crypto markets," Ananya Kumar, deputy director of the Atlantic Council's Future of Money team, tells Axios.

Financial services giant State Street, with roughly $41.8 trillion in assets under custody or administration, is said to be weighing the creation of a stablecoin and deposit token as part of a crypto-solution around settlement, per a Bloomberg report published yesterday.

💭 Our thought bubble: It makes sense that the Boston-based firm, which includes SSGA, the asset management arm behind the SPDR ETFs, would reach for blockchain technology in this way.

• Its own stablecoin or deposit token would probably not be consumer-facing, but rather for performing back-office functions, with a set of approved counterparties.

State Street did not respond to emailed queries asking for confirmation.

Blockchain-loving venture capitalists are tending toward former President Trump in the 2024 election, but it's not unanimous.

Why it matters: Where business leader endorsements go, financial support for campaigns is likely to flow.

The latest: On Tuesday, the founders of Andreessen Horowitz (aka, a16z) posted a YouTube video about their decision to back the Republican candidate.

• Marc Andreessen and Ben Horowitz give several reasons, but their frustrations over crypto policy seem to be the one they take the most personally.

What they're saying: "I've been in absolute shock that this has ever happened," Andreessen said. "This has been a brutal assault on a nascent industry that I've never experienced before ... it's been impossible to make progress in this with the White House."

• Horowitz described the Biden administration's approach to cryptocurrency as "talk to the hand," contrasting that with former presidents Clinton and Obama, both Democrats they found more open to discussion with business leaders.

The fine print: In the talk, Andreessen is focused on the events of the story, while Horowitz seems more distraught by the consequences their endorsement is going to have for them and their staff.

• Horowitz shifts subjects abruptly, saying, "This is probably the most emotional topic, so let's move on to artificial intelligence."

The other side: There are major tech leaders with crypto investments who support President Biden.

• LinkedIn co-founder, Greylock partner (occasional crypto investor and filmmaker) Reid Hoffman has stood with Biden, including penning an op-ed saying that business leaders should back someone who has been a consistent, steady hand in the White House.
• Following the president's debate performance, which shocked many of his supporters, Hoffman doubled down. He said on CNBC that business leaders should stick with Biden.

Mark Cuban is another crypto investor who has also stuck with the Democrats. He says the lurch toward Trumpism is not, in his view, really about a better regulatory climate.

• "It's a bitcoin play," Cuban wrote on X.
• If elected, he predicted a Trump trifecta of lower taxes, higher tariffs and geopolitical uncertainty.
• "You can't align the stars any better for a BTC price acceleration."

Between the lines: Ethereum's founder and an investor himself, Vitalik Buterin, criticized the recent endorsement trend without backing any candidates.

• In a blog post yesterday, he urged people not to put the industry before the ideas behind the technology in the voting booth.
• "What originally created crypto was the cypherpunk movement, a much broader techno-libertarian ethos which argued for free and open technology as a way of protecting and enhancing individual freedoms generally," he writes.

The bottom line: There are no monoliths in this election.

🐘 Sen. Bill Hagerty (R-Tenn.) said Trump sees the potential for blockchain technology to lift the U.S. economy. (Axios)

👂 Trump said that he would consider JPMorgan Chase CEO Jamie Dimon as Treasury Secretary, claiming that he has "changed his tune a little bit" on crypto. (Bloomberg)

🇮🇳 Indian cryptocurrency exchange WazirX confirmed a major breach. (TechCrunch)

💸 Coinbase will manage repayments for customers of bankrupt crypto lending firm. (BlockFi)