Banking Blog

Finance Blogs » Banking » Campaign donations in bitcoin?

Campaign donations in bitcoin?

By Allison Ross · Bankrate.com
Wednesday, April 23, 2014
Posted: 11 am ET

BitcoinThe Federal Election Commission is expected to consider again how bitcoin and other virtual currencies can be contributed to political campaigns and political action committees.

On its agenda for Wednesday's meeting are two draft advisory opinions governing how bitcoin could be used for political donations. The FEC in November deadlocked on the issue of whether federal candidates and PACs can accept virtual currency.

In the absence of a ruling, some candidates have begun dipping their toes into the virtual waters.

For instance, Texas Attorney General Greg Abbott, who is running for governor, has added a bitcoin donation form to his election site. His site includes this explanation:

"Hello, bitcoin community! Texas law allows political campaigns to accept contributions of currency or other assets. Because state and federal law do not currently recognize bitcoin as currency, your contribution to Texans for Greg Abbott of bitcoin will be listed as an in-kind contribution to the campaign. In order to comply with state law, we must attribute your bitcoin donation to you and thus collect the following pieces of information."

The site then gives a form to fill out as well as the bitcoin wallet address of "Team Abbott," and says it will use the current market value at the time of the transaction to determine the monetary value of the contribution.

Bitcoin becoming more mainstream

The fact that bitcoin is moving into political donations speaks in part to how the virtual currency has become more broadly accepted.

The IRS in March released guidelines governing how bitcoin was to be taxed after wrangling for months over the issue while bitcoin's popularity soared.

Two advisory opinions

The FEC advisory opinions were submitted by the Make Your Laws nonpartisan PAC, which says on its site that it is trying to enhance democracy for everyday Americans and is looking for clarification on how bitcoin can be used by campaigns and PACs.

One opinion suggests bitcoin be accepted as in-kind contributions and that Make Your Law should be able to buy goods and services with the bitcoins it receives. That opinion would allow PACs to also buy and sell bitcoin and deposit the proceeds of the sale of bitcoin into campaign funds.

The second opinion is more restrictive, limiting bitcoin contributions to up to $100 per donor and requiring that the campaign or PAC turn the virtual currency into U.S. dollars within 10 days.

It's unclear how the commission will respond at this point.

What do you think? Should bitcoin be used for campaign contributions?

The world of virtual currencies is getting crowded. Check out these alternatives to bitcoin.

Follow me on Twitter: @allisonsross.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
Add a comment

(Comments may take 5-10 minutes to appear)